Q+A: What's next for Senate healthcare bill

WASHINGTON (Reuters) - U.S. Senate Democratic healthcare negotiators have agreed to replace a government-run public insurance option with a scaled-back non-profit approach, potentially resolving a big stumbling block to passing a healthcare overhaul.

The deal, announced late on Tuesday, would replace the public option with a national non-profit health plan featuring policies offered by private insurers and administered by the Office of Personnel Management, which supervises health coverage for federal workers.

Liberal Senate negotiators, who backed the public option as a way to create more competition for insurers, agreed to drop their support in exchange for an expansion of the Medicare health program for the elderly to people as young as 55 from the current 65. The new enrollees would buy in to Medicare.

Here are a few questions and answers about the tentative agreement, which has been sent to the Congressional Budget Office for cost estimates, and what it means to the broader healthcare overhaul that is President Barack Obama's top domestic priority.

WHAT ARE THE BILL'S SENATE PROSPECTS NOW?

Senate Democratic leader Harry Reid said the agreement would clear a path to final passage for the Senate bill, but many obstacles remain. The Senate is on its 10th day of debate on the overhaul and racing to complete work by year's end.

Reid appointed the 10 negotiators -- five liberals and five moderates -- to find a compromise on the public insurance option after several moderates led by Senators Joe Lieberman and Ben Nelson made it clear they could not accept a bill that included a government-run plan.

Both Lieberman and Nelson have been more favorable toward the substitute proposal, but have not committed to supporting it until they see the cost estimates from CBO. Those are expected within the next five days.

Some liberal senators who were not in the negotiations have grumbled about efforts to drop the public option. At least two, Bernie Sanders and Roland Burris, have said they would be hesitant to support a healthcare bill without a public option.

WHAT ARE THE NEXT STEPS FOR THE DEAL -- AND THE BILL?

Reid refused to divulge the details of the proposals sent to CBO for cost estimates, preserving his flexibility to adjust the plan in response to the findings.

Several senators not involved in the negotiations said they have reservations about the Medicare expansion and are worried about the added costs and what it means for the fiscal solvency of a program that already faces a financial crisis.

Once Reid and the negotiators evaluate the CBO report and complete the details of the proposals, they will be included in a "manager's amendment" that Reid will offer to the bill.

That amendment will make the final adjustments that Reid thinks he needs to win the 60 votes necessary for passage.

WHAT DOES THIS MEAN FOR THE TIMELINE FOR PASSAGE?

Reid is pushing for a final vote before Christmas. To get there in the face of Republican opposition, he probably needs to file at least three procedural motions to cut off debate and move to votes -- one each on the manager's amendment, the underlying healthcare bill and on final passage.

Each of those motions requires at least 30 hours of debate, meaning Reid needs to begin filing them by next week if he has any hope of finishing the bill by Christmas.

WHAT DOES THIS MEAN FOR RECONCILING THE HOUSE BILL?

The House of Representatives passed its own version of a healthcare overhaul last month that includes a government-run insurance option. The Senate and House bills must be reconciled and passed again before they are sent to Obama to sign.

If the Senate substitutes the non-profit plan, it will create particularly thorny negotiations. Some House liberals have already said they are unhappy with the compromises taking place in the Senate.

The House bill also includes stricter language forbidding the use of federal funds for abortion than the Senate bill. The Senate rejected the stricter language on Tuesday.

(Reporting by John Whitesides; Editing by Eric Beech)