* Senate bill calls for insurance market overhaul
* Leaves blank details of proposed government health plan
* Obama promises Medicare and Medicaid savings (Adds new material throughout)
WASHINGTON, June 9 (Reuters) - Leading Senate Democrats unveiled on Tuesday a plan to reshape U.S. healthcare that calls for sweeping insurance market reforms and prohibits insurers from denying coverage or charging more due to medical history.
The measure also would require individuals to buy insurance, provide subsidies to help make coverage affordable and set up a new government plan to help provide medical coverage for the uninsured.
The Senate Health, Education, Labor and Pensions Committee’s bill is one of at least three healthcare proposals brewing in Congress, which Democrats hope will lead to legislation that President Barack Obama can sign into law by October.
“Our goal is to strengthen what works and fix what doesn’t,” Senator Edward Kennedy, chairman of the committee, said in a statement that accompanied the bill’s unveiling.
Democrats in the U.S. House of Representatives and a second group of U.S. senators led by Senate Finance Committee Chairman Max Baucus are developing similar proposals. Baucus has been working with Kennedy’s panel and is expected to unveil his version of the bill in the coming days.
Meanwhile Democratic members of the House Ways and Means Committee, one of three panels writing the House version of the bill, met with Obama to discuss the legislation. The White House issued a statement saying the group agreed that the cost of the overhaul, which some estimates put at about $1.2 trillion, should not add to budget deficits.
The White House said Obama -- under pressure from critics over his huge spending and deficit plans -- would soon spell out more cost savings for the Medicare and Medicaid health programs for the elderly and poor.
MORE WORK NEEDED
The Kennedy panel will hold a public hearing on its bill on Thursday and will begin considering amendments in public sessions beginning on June 16, the committee said.
“Much work remains, and the coming days and weeks won’t be easy. But we have a unique opportunity to give the American people, at long last, the health care they need and deserve,” said Kennedy, who is in his second year of fighting brain cancer.
Obama has called on Congress to pass legislation this year to overhaul the $2.5 trillion healthcare system, aiming to cut costs and ensure that millions of Americans now without health insurance get coverage.
But many congressional Republicans have criticized Democratic proposals for including a public insurance program that would compete with private insurers.
In a bow to Republican concerns, Kennedy’s committee bill leaves open the details of how such a plan would operate. Panel Democrats and Republicans are set to meet this week to try to work out differences over the public plan.
Also still to be worked out are details on whether employers would be required to offer insurance to workers.
The House and Senate bills would establish an exchange, a kind of clearinghouse, where people and small businesses could shop for insurance. Lawmakers want the proposed new public plan to be an option offered in that exchange.
Democrats say a public plan that competes with private insurers is the only way to contain costs and keep premiums low. Republicans and insurers argue that it would drive insurance companies out of business and lead to an entirely government-run U.S. healthcare system.
“If you don’t have a public option, who is going to keep the insurance companies honest?” said Senator Charles Schumer, a member of the Senate Democratic leadership. “Most of us don’t believe that government regulation will be sufficient because they have the profit motive.” (Writing by Donna Smith; Editing by Xavier Briand)
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