US Senate panel renews healthcare fight on seniors

(For other stories on healthcare reform, click [nN20512341])

* Democrats reject two Republican Medicare amendments

* US Senate Finance panel renews battle over seniors

* Committee faces hundreds of remaining amendments

By John Whitesides and Donna Smith

WASHINGTON, Sept 24 (Reuters) - The Senate Finance Committee renewed a battle over health insurance for the elderly on Thursday, with Democrats rejecting Republican proposals aimed at limiting potential benefit cuts for seniors in a healthcare overhaul.

On the third day of deliberations on Chairman Max Baucus's proposal, the Democratic-controlled panel defeated two Republican amendments to block cuts in Medicare Advantage, which augments the government's Medicare insurance program for the elderly with private insurance.

The committee has made slow progress on hundreds of amendments to the proposed $900 billion overhaul, the last of five bills pending in Congress on President Barack Obama's top domestic policy priority.

The panel's reform bill would curb government subsidies to the Advantage plan. Republicans say the changes would force insurance companies out of the market and change or eliminate the current benefits for many of the program's 10 million participants.

"Why would we take this away from 10 million people?" asked Republican Senator Orrin Hatch. "This is a terrific program. It works."

Democrats say the changes to Medicare would increase benefits and participation over 10 years and shore up Medicare's trust fund.

'TELL THEM THE TRUTH'

"At some point we have to look people in the eye and tell them the truth," Democratic Senator Kent Conrad said. "The notion we don't have to change anything, just stick with the status quo, is a disaster."

Democrats, who hold 13 seats on the committee compared to 10 for the Republicans, defeated proposals to block the bill from taking effect if it forced more than 1 million people to lose coverage and to block the Medicare changes if it forced private insurers out of the market and reduced choice.

Hundreds of amendments remain on the healthcare overhaul, which mirrors Obama's proposals to rein in costs, increase insurance competition and regulation and expand coverage to many of the 46 million uninsured people living in the United States.

Under the Baucus plan, all U.S. citizens and legal residents would be required to obtain health insurance, with subsidies offered on a sliding scale to help people buy it.

The plan would create state-based exchanges where individuals and small businesses could shop for insurance.

It does not include a new government-run insurance program -- known as the "public option" -- that would compete with private insurers. That is included in the other four healthcare bills in Congress and is backed by Obama and liberal Democrats. (Editing by Simon Denyer and Will Dunham)