[READ IT: Full text of Republican response]
[INTERACTIVE: Understanding the plan for reform]
Obama said the changes he wants would cost about $900 billion over decade, "less than we have spent on the Iraq and Afghanistan wars, and less than the tax cuts for the wealthiest few Americans" passed during the Bush administration.
In a televised speech to a joint session of Congress, Obama spoke in favor of a provision for the federal government to sell insurance in competition with private industry. But in a remark certain to displease liberals, he did not insist on it, and said he was open to other alternatives that create choices for consumers.
Obama said he remains ready to listen to all ideas but added in a clear reference to Republicans, "I will not waste time with those who have made the calculation that it's better politics to kill this plan than to improve it."
In an unusual outburst from the Republican side of the House chamber, Rep. Joe Wilson, R-S.C., shouted out "You lie" when the president said illegal immigrants would not benefit from his proposals. The president paused briefly and smiled, but from her seat in the visitor's gallery, first lady Michelle Obama shook her head from side to side in disapproval of the interruption. Wilson later apologized for his "lack of civility."
In general, the president shied away from providing lawmakers with a list of particulars he wants to see included in the legislation, and there was nothing in the speech to invite comparisons with Bill Clinton's pen-waving veto threat more than a decade ago on health care.
Obama's speech came as the president and his allies in Congress readied an autumn campaign to enact his top domestic priority. Republican opposition, contentious town hall meetings and drooping polls have contributed to their woes. An AP-GfK survey released hours before the speech showed public disapproval of Obama's handling of health care has jumped to 52 percent, an increase of 9 percentage points since July.
While Democrats command strong majorities in both the House and Senate, neither chamber has acted on Obama's top domestic priority, missing numerous deadlines leaders had set for themselves.
In a fresh sign of urgency, Sen. Max Baucus, D-Mont., announced that his Senate Finance Committee would meet in two weeks to begin drafting legislation, whether or not a handful of Democrats and Republicans have come to an agreement. The panel is the last of five to act in Congress, and while the outcome is uncertain, it is the only one where bipartisanship has been given a chance to flourish.
Obama said there is widespread agreement on about 80 percent of what must be included in legislation. Any yet, criticizing Republicans without saying so, he added: "Instead of honest debate, we have seen scare tactics" and ideological warfare that offers no hope for compromise.
"Well, the time for bickering is over," he said. "The time for games has passed. Now is the season for action."
"I am not the first president to take up this cause, but I am determined to be the last," he added.
The president was alternately bipartisan and tough on his Republican critics. He singled out Sen. John McCain, R-Ariz., for praise at one point. Yet, moments later, in a line apparently aimed at McCain's former running mate, Sarah Palin, Obama accused Republicans of spreading the "cynical and irresponsible" charge that the legislation would include "death panels" with the power to hasten the death of senior citizens.
In one gesture to Republicans, Obama said his administration would authorize a series of test programs in some states to check the impact of medical malpractice changes on health insurance costs.
Responding on behalf of Republicans, Rep. Charles Boustany, R-La., said the country wants Obama to instruct Democratic congressional leaders that "it's time to start over on a common-sense, bipartisan plan focused on lowering the cost of health care while improving quality."
"Replacing your family's current health care with government-run health care is not the answer," said Boustany, a heart surgeon.
In a reflection of the stakes, White House aides mustered all the traditional pomp they could for a president who took office vowing to change Washington. The setting was a State of the Union-like joint session of Congress, attended by lawmakers, members of the Cabinet and diplomats.
The House was packed, and loud applause greeted the president when he walked down the center aisle of the House chamber.
Additionally, the White House invited as guests men and women who have suffered from high costs and insurance practices, seating them near first lady Michelle Obama. Vicki Kennedy, the widow of Sen. Edward M. Kennedy, D-Mass., was also on the guest list. Kennedy, who died last month, had made health care a career-long cause, and Obama spoke movingly of his efforts.
Obama intends to follow up the speech with an appearance Saturday in Minneapolis, the White House announced.
Despite deep-seated differences among lawmakers, Obama drew a standing ovation when he recounted stories of Americans whose coverage was denied or delayed by their insurers with catastrophic results.
"That is heartbreaking, it is wrong, and no one should me treated that way in the United States of America."
The president sought to cast his own plan as being in the comfortable political middle, rejecting both the government-run system that some liberals favor and the Republican-backed approach under which all consumers buy health insurance on their own.
Obama said the legislation he seeks would guarantee insurance to consumers, regardless of pre-existing medical conditions, as well as other protections. "As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most," he added.
The president assured those with insurance that "nothing in this plan will require you or your employer to change the coverage or the doctor you have."
Obama also said the legislation he seeks would help those who lack insurance to afford it. "These are not primarily people on welfare," he said in a line that appeared aimed at easing concerns among working-class voters. "These are middle-class Americans."
The president also said he wants legislation that "will slow the growth of health care costs for our families."
Obama said a collective failure to meet the challenge of overhauling health care for decades has "led us to a breaking point."
The so-called government option that Obama mentioned has emerged as one of the most contentious issues in the monthslong debate over health care, with liberal Democrats supporting it and many moderates inside the party opposed. An early draft of Baucus' plan calls for an alternative consisting of nonprofit co-ops. Sen. Olympia Snowe of Maine, the Republican who seems most inclined to cross party lines on the issue, favors a different approach, consisting of a standby in which the government could sell insurance if competition fails to emerge in individual states.
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