UPDATE 1-Obama presses healthcare overhaul in US heartland

* Obama takes healthcare push on the road

* U.S. president calls current system unsustainable

* He acknowledges public concerns about cost

(Adds quotes and background)

By Doug Palmer

GREEN BAY, Wis., June 11 (Reuters) - President Barack Obama took his push for healthcare overhaul to the U.S. heartland on Thursday, calling the current system unsustainable and vowing not to tolerate "endless delay" before acting to fix it.

Hosting a townhall-style meeting, Obama stuck to his view that a government-sponsored insurance plan must be part of a healthcare revamp, despite opposition to the idea from Republicans, private insurers and even the influential American Medical Association doctors' group.

"We have reached a point where doing nothing about the cost of health care is no longer an option. The status quo is unsustainable," the Democratic president said. He insisted, however, he was not seeking a "government takeover" of the troubled system.

Obama's drive on healthcare comes as lawmakers seek to craft a bill and pass it through the Senate before their summer break. Democratic leaders in the House of Representatives also hope to pass legislation by August.

"As Congress moves forward on healthcare legislation in the coming weeks, I understand there will be different ideas and disagreements ... I welcome those ideas," he said. "But what I will not welcome is endless delay."

Underscoring a sense of urgency, he said, "If we don't get it done this year, we're probably not going to get it done."

COSTS

Obama acknowledged public concerns about the cost of extending coverage to tens of millions of people who do not have health insurance at time when the government is spending heavily on economic recovery programs and financial bailouts.

"That's why I have already promised that reform will not add to our deficit over the next 10 years," he said.

"To make that happen, we have already identified hundreds of billions worth of savings in our budget -- savings that will come from steps like reducing Medicare overpayments to insurance companies and rooting out waste, fraud and abuse in both Medicare and Medicaid," he said. "I will be outlining hundreds of billions more in savings in the days to come."

But with some estimates putting the cost of healthcare reform at $1.2 trillion, Obama conceded those savings will not be enough.

"That's why I've proposed that we scale back how much the highest-income Americans can deduct on their taxes back to the rate that existed under the Reagan years and we can use use that money to help finance health care," he said.

Back in Washington, the Senate Health, Education, Labor and Pensions Committee was scheduled to hold a hearing on a plan that would prohibit insurers from denying coverage or charging more due to medical history.

Many congressional Republicans have criticized Democratic proposals for including a public insurance program that would compete with with private insurers.

Defending that idea, Obama said, "The reason is not because we want a government takeover of health care ... But we want some competition. If the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down."

For more healthcare reform news click on [nN02516257]. (Writing by Matt Spetalnick; Editing by Anthony Boadle) (matt.spetalnick@reuters.com ; +1 202 898 8300; Reuters Messaging: matt.spetalnick.reuters.com@reuters.net))