* Pelosi says healthcare bills would reduce deficit
* Healthcare overhaul priced below $900 billion
By John Whitesides
WASHINGTON, Oct 20 Democrats in the U.S. House of Representatives moved closer on Tuesday to agreeing on a broad healthcare reform plan that would include the most liberal version of a government-run public insurance option.
House members leaving an evening meeting with House Speaker Nancy Pelosi said a "robust" public option was gaining support, buoyed by preliminary estimates from budget analysts putting the cost of a bill with the option at less than President Barack Obama's $900 billion target.
"The robust public option clearly outperforms the others," Representative Robert Andrews said after a two-hour meeting to discuss the choices. "Members are searching for the best way to reduce the cost of the bill and this is the best way."
The public option, favored by Obama and liberals as a way to create choice and competition in the insurance market, has become a debate flashpoint with critics calling it a government takeover that would hurt private insurance companies.
Democrats will launch a head count on Wednesday to gauge whether a bill that includes the strong version of a public option preferred by House liberals had the 218 votes needed to pass.
"The robust option is going to be at 218 plus," Representative Raul Grijalva said of a version that would peg reimbursement rates for healthcare providers to Medicare, the health program for the elderly.
Two other versions of the public option considered in the House would be based on reimbursement rates negotiated with doctors and hospitals, which has been the approach favored by some Democratic moderates and representatives of rural areas.
CLASH WITH SENATE
The inclusion of the strongest possible government-run public insurance option in the House bill could force a confrontation with the Senate, where the public option has less support and is less certain to be included in a final bill.
Obama has made a healthcare overhaul that reins in costs, regulates insurers and expands coverage to the uninsured his top domestic priority, but progress has been slowed in both chambers of Congress by battles over its size and cost.
Democratic House leaders, who have been meeting for weeks to merge three healthcare bills into one, said they were close to making their final decisions after the two-hour meeting.
They had asked for budget estimates on the three versions of a public option, and Pelosi said the preliminary estimates of the Congressional Budget Office indicated all three would reduce the budget deficit over 10 years, and at least two of the three would cost below $900 billion.
"The preliminary estimates we've seen from the CBO enable us to make our choices knowing that whatever choice we make will reduce the deficit and will pay for the bill," said Pelosi, who did not release the estimates.
A House Democratic aide said a bill with the "robust" version of the public option favored by liberals was estimated to cost about $870 billion, down from the more than $1 trillion price tag of the three original bills.
House members said the final CBO numbers were expected later this week.
A Washington Post/ABC News poll released on Tuesday showed the public option winning the support of a majority of Americans, 57 percent, but a top House Democrat said it was still short of the 60 votes it needed in the Senate.
"I'm told ... they have 53 to 54 votes in support of a public option in the Senate," Representative Chris Van Hollen told Reuters.
Senate leaders met for a second consecutive night to work on merging two healthcare bills into one for floor debate. Only one of the two bills includes a public option.
Senate Democratic leader Harry Reid said afterward the session, attended by White House Chief of Staff Rahm Emanuel, was another step forward. "We're not completely to the point where the two bills are together," he said.
A related proposal to boost Medicare payments to doctors ran into trouble in the Senate on Tuesday as Republicans and some Democrats balked at adding $250 billion to skyrocketing U.S. deficits over the next decade.
Senator Richard Durbin said Democratic leaders lack the 60 votes needed for the measure to overcome procedural hurdles in the 100-member Senate. (Additional reporting by Donna Smith and Susan Heavey; editing by Mohammad Zargham)
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