U.S. Democrats vow to move ahead on healthcare

WASHINGTON (Reuters) - Democratic congressional leaders said on Thursday they would keep pushing for a stalled healthcare overhaul and would explore all options to pass it, but acknowledged the process would not move quickly.

The day after President Barack Obama's State of the Union address to the U.S. Congress, leaders in the Senate and the House of Representatives said they would not abandon the bill despite sharp Democratic divisions on how to proceed.

"We will move on many fronts -- any front we can," House Speaker Nancy Pelosi said of the overhaul, mired in legislative gridlock since last week's Republican win in Massachusetts cost Democrats their crucial 60th vote in the Senate.

"We must take whatever time it takes to do it," she told reporters. "But we are going to get healthcare reform passed for the American people."

In his speech, Obama urged lawmakers to push ahead with healthcare reform this year but he focused more heavily on his job creation and economic agenda, putting a lower priority on healthcare ahead of November's congressional elections.

Obama gave lawmakers no guidance on how to proceed, but told them to let "temperatures cool" and then take a fresh look at his healthcare plan.

Many congressional Democrats are anxious to turn to job issues and put aside the unpopular healthcare bill, which would extend coverage to tens of millions of Americans and more sharply regulate insurers.

Senate Democratic leader Harry Reid reiterated there was no rush to pass the healthcare overhaul, the object of more than six months of intense political brawling in Congress.

"This is not a one-year Congress. It's a two-year Congress," Reid told reporters. "We're going to do healthcare reform this year. The question is at this stage procedurally how do we get where we need to go?"

Democrats have scrambled over the past week to come up with a new strategy to pass the healthcare overhaul, which was nearing final passage before it was derailed by the election. An afternoon meeting of Senate leaders produced no consensus.

STAY AGGRESSIVE

"We will move forward even more aggressively," Senate Finance Committee Chairman Max Baucus said, although there is no easy path ahead.

The shift in focus and the likelihood that the bill could be pared down sent shares of health insurance companies higher in early trading. The stocks drifted down later, but still outperformed the overall market.

"Healthcare investors are breathing a sigh of relief," said Leerink Swann Research analyst John Sullivan.

The S&P Managed Health Care closed almost flat after moving up nearly 2 percent in morning trade. The Morgan Stanley Healthcare Payor Index closed down less than 1 percent.

House Democrats are exploring which healthcare issues could be passed separately, with a repeal of the federal antitrust exemption for insurers and other industry regulations being considered.

"Some things we can do on the side which may not fit into a bigger plan. That does not mean that is a substitute for doing comprehensive," Pelosi told reporters.

"When we are ready, we will bring them to the floor. Right now, we want to see where the Senate will go on its legislation," she said.

One plan would be for the House to pass the Senate health bill, eliminating the need for another Senate vote, and both chambers then to pass House-sought changes to the Senate bill through a process called reconciliation.

That parliamentary procedure would require a simple majority of 51 votes in the Senate, but risk a possible political backlash by bypassing unified Republican opposition.

"It's one of the options obviously," Dick Durbin, the No. 2 Democrat in the Senate, said of reconciliation.

(Additional reporting by Susan Heavey, David Morgan and Richard Cowan; Editing by Chris Wilson)