July 22 (Bloomberg) -- President Barack Obama and congressional Democratic leaders are trying to mend fissures within their own party over plans to overhaul U.S. health care.

A rebellion over the cost of the legislation prompted Obama to summon some Democrats to the White House for talks as a congressional committee delayed drafting its bill and Republicans sought to capitalize on the friction.

Negotiations over the most sweeping changes in health care in more than four decades have proven so difficult that House Majority Leader Steny Hoyer left open the possibility Congress may fail to meet Obama’s August deadline for legislation.

“The seven of us can’t support the bill as it stands,” said Representative Mike Ross of Arkansas, a leader of the Blue Dog Coalition of fiscally conservative Democrats, speaking for a group of lawmakers who met with Obama yesterday to voice concern over a plan unveiled July 14 by House leaders.

Obama spent more than an hour talking with those lawmakers, who are members of the House Energy and Commerce Committee, which has yet to pass its part of the legislation.

To help win over the Blue Dogs, Committee Chairman Henry Waxman agreed to include a provision to create an independent commission to set reimbursement rates for Medicare providers each year. Ross said such a body would take politics out of decisions on the federal insurance program for the elderly.

Waxman, a California Democrat, postponed plans for his panel to debate the legislation today so talks can continue.

‘Turning Point’

During the White House meeting, Obama asked lawmakers to take “a favorable attitude toward his proposal” to set up the five-member commission, Waxman said.

Acknowledging his own “personal misgivings,” Waxman said such a panel would have a lot of power to cut health-care costs. He said he couldn’t speculate on how much authority Congress would ultimately surrender to a commission.

“The Blue Dogs members thought that committee made a lot of sense,” Waxman said. He called the agreement to include such a committee “a major turning point of discussions.”

Ross said the group arrived at the White House with 10 Blue Dog demands and spent most of the time on two priorities: producing a deficit-neutral measure and containing costs.

The current House plan would expand insurance coverage to 97 percent of Americans while adding $239 billion to the budget deficit over 10 years, according to the Congressional Budget Office. The Blue Dogs say it doesn’t do enough to control the spiraling costs of Medicare and Medicaid.

Airing Grievances

Indiana Representative Baron Hill, another Blue Dog Democrat, said the group heard a great deal from Chief of Staff Rahm Emanuel during the meeting at the White House.

“A few choice words were used,” Hill said.

Obama ramped up the pressure amid concern that deadlines are slipping. He has asked the House and Senate to pass their versions before their summer breaks. The House plans to adjourn July 31, and the Senate intends to go home a week later.

The increasing likelihood that Congress won’t meet the deadline was underscored by Hoyer, a Maryland representative and the No. 2 House Democrat, when he said his members may leave town without voting on the legislation.

“I don’t think staying in session” is “necessary to continuing to work on getting consensus,” Hoyer said at a news conference. “Obviously, members have concerns.”

Other Committees

The two other House committees with jurisdiction over health care -- Education and Labor and Ways and Means --cleared their parts of the plan on July 17 without Republican support. The Senate Health, Education, Labor and Pensions Committee passed its legislation on a party-line vote on July 15.

Senate Finance Committee Chairman Max Baucus of Montana has failed to reach a compromise with Republicans weeks after he initially planned a vote, and Democrats are accusing Republicans of trying to impede progress.

“The party of ‘No’ is hoping that we’ll trip and fall, and they’re saying it publicly,” Senate Democratic Leader Harry Reid told reporters in Washington. Both he and Hoyer cited a comment by Republican South Carolina Senator Jim DeMint, that “if we’re able to stop Obama on this, it will be his Waterloo.”

Reid charged that Republicans “simply want to maintain the status quo” and to keep the insurance industry “in charge of health-care delivery.”

‘Slow Things Down’

DeMint defended his remark on Fox News, saying “the whole purpose of the Senate is to slow things down and debate them.” Obama “wants to take over health care just as he’s taken over General Motors and Chrysler and our banking industry.”

North Dakota Democrat Kent Conrad, one of seven senators working on an agreement on the Finance Committee, said the group may opt to tax insurers and employers who provide “Cadillac” plans valued at more than $25,000 a year for a family of four.

While Obama has indicated he may be open to such a tax, insurers objected.

The tax may end up “penalizing the employers and plans that you want to be your economic engines” without getting at the underlying causes of rising medical costs, said Elizabeth Hall, vice president for public policy at Indianapolis, Indiana- based WellPoint Inc., the largest U.S. insurer by enrollment.

To contact the reporters on this story: Kristin Jensen in Washington at kjensen@bloomberg.net; Nicole Gaouette in Washington at ngaouette@bloomberg.net

Last Updated: July 22, 2009 00:01 EDT