FACTBOX: U.S. healthcare overhaul faces many hurdles

(Reuters) - Although the U.S. House (of Representatives) has approved sweeping healthcare reform, the legislation still has a long way to go before reaching President Barack Obama for his signature.

Senate leaders are now working to finalize a bill that will go to the floor for debate. Once the Senate acts, the two chambers will have to work out differences between their two versions, vote on a merged bill, and send it to Obama.

Here are some potential sticking points as legislation advances through the Senate. Details on the Senate version reflect a version passed by the Senate Finance Committee. Senate leaders have yet to unveil their version.

* Public Option

The House bill includes a new government-run health insurance plan that would be offered on proposed new insurance exchanges where people could shop for coverage. It is meant to compete with private insurance policies to keep prices down and reduce the number of people without health coverage.

The Senate may pass a more limited public option under which there would be a "trigger" allowing states to offer such a plan only if insurance market reforms fail to meet cost and coverage targets.

* Financing

This could be the biggest sticking point between the two chambers.

The House pays for the roughly $1 trillion price tag for its bill, which would extend coverage to an estimated 36 million uninsured Americans, chiefly by imposing a 5.4 percent surtax on wealthy people.

The Senate legislation, as approved by the Senate Finance Committee, pays for itself partly by imposing a surtax on expensive health insurance plans that offer generous coverage with small or no co-payments by the insured.

Neither chamber likes the approach taken by the other.

* Mandates

Both chambers require individuals to buy health insurance but differ on penalties. The House would impose the lesser of a 2.5 percent tax on income or the cost of the average premium on people who failed to purchase policies. The Senate would impose a maximum penalty of $750 per adult.

The Senate Finance bill has no employer mandate but it requires employers with 50 or more full-time workers to pay the government a fee, up to $400, per their total employees, if any employee buys health policies with government subsidies.

The House requires firms with payrolls of more than $500,000 to help obtain insurance for their workers. Failure to provide coverage would result in fines of up to 8 percent of payroll.

* Medicaid

The Senate would expand the Medicaid healthcare program for the poor, which is jointly funded by the federal and state governments, to cover everyone up to 133 percent of the poverty income level.

The House would expand the program for everyone up to 150 percent of the poverty income level. Many state governors are worried about the cost of expanding this program to millions of people.

The states currently determine who is eligible for Medicaid and in some cases set the income limit below the poverty line.

* Abortion

This issue threatens to upset efforts by Democratic leaders to win votes for the sweeping healthcare reform.

The House bill contains a strict prohibition against using federal subsidies to purchase insurance policies that cover abortion. Abortion rights supporters have threaten to withhold support for a final bill if the language stands.

A less strict prohibition is included in Senate bills, but a group of moderate Senate Democrats favor the tougher language in the House. Democratic Senate Leader Harry Reid said he believed senators could work out a compromise.

(Reporting by Donna Smith; Editing by David Storey)