DAVID ESPO

The Associated Press

WASHINGTON (AP) - House Democrats are taking steps to limit annual price increases for insurance policies sold under a sweeping bill to extend health care to nearly all the 50 million uninsured Americans, officials told The Associated Press on Friday.

The legislation taking shape in the Energy and Commerce Committee also would permit the government to negotiate directly with pharmaceutical companies for lower prices on drugs under Medicare, the officials said.

These provisions are part of a series of trade-offs negotiated overnight as Democratic leaders struggled to push the health care bill through the committee, the third of three panels to debate the health care issue. The committee was the final obstacle on the way to the House floor and passage would give momentum to President Barack Obama's top domestic priority.

These officials spoke on condition of anonymity, saying they were not permitted to discuss private discussions.

On Friday, Democrats on the committee moved methodically through the complex legislation.

"We have agreed we need to pull together," said Chairman Henry Waxman, D-Calif.

Liberals, moderates, and conservatives negotiated late into the night Thursday to reach a deal that would restore some subsidies to help low-to-middle income people pay their health insurance premiums, would preserve a strong public insurance option, and would cut drug costs more deeply, lawmakers said.

No details of the deal were immediately available, but Waxman said he intends to formally present it to the committee later in the day, and the panel should pass the bill Friday afternoon. Two other House committees, dominated by liberals, have already passed their versions of the bill. Energy and Commerce better represents the makeup of the House as a whole.

The full committee resumed its deliberations after the last-minute agreement mollified liberals outraged by another deal Waxman struck earlier in the week with conservatives known as the Blue Dog Democrats. "We felt it was paid for on the backs of some of the people who can't afford health insurance now," said Rep. Diana DeGette, D-Colo.

Lawmakers from both camps said Friday they were now in accord. "We need to get this done," said Rep. Baron Hill, D-Ind., one of the Blue Dogs.

As recently as two weeks ago passage of the bill by Energy and Commerce might not have looked like much of a victory. But after a series of delays and some rancorous disputes, final House committee action on a health overhaul is sure to be hailed as a big step forward.

It would come on the House's final day in session before lawmakers leave Washington for their annual monthlong summer recess.

"The American people will have a chance to see what's in it for them, and our members will have a chance to discuss this with their constituents," said House Speaker Nancy Pelosi, D-Calif. "And when they come back in September, we'll take up the legislation."

The progress in the House was not matched in the Senate, where bipartisan negotiators announced they needed additional time to produce any agreement for their committee to review.

The House bill, whose total costs are estimated at about $1.5 trillion over 10 years, would eventually cover nearly all the uninsured.

Low-income people would be helped through an expansion of Medicaid, while middle-class workers and their families would receive federal subsidies to pick a plan through a new insurance purchasing pool called an exchange. A government-sponsored plan would be available through the exchange, alongside private coverage. The main expansion of coverage would not come until 2013 - after the next presidential election.

To pay for the bill, Democrats are proposing a combination of cuts in government health care programs and a tax increase on the wealthy of more than $500 billion over 10 years. The higher taxes would take effect right away.

The bill would also add more than $200 billion to the federal deficit. That's because it doesn't offset the cost of a provision that raises projected Medicare payments to doctors.

There was late-night drama in Waxman's committee Thursday as an anti-abortion amendment passed when conservative Democrats joined Republicans to support it - then failed less than two hours later when Waxman used a procedural maneuver to bring it up for a second vote.

In the intervening time one conservative Democrat - Rep. Bart Gordon of Tennessee- changed his vote from "yes" to "no." And a second conservative Democrat who hadn't voted the first time - Rep. Zack Space of Ohio - voted "no." It was enough to take the amendment down on a vote of 29 to 30.

The measure would have specified that health care legislation moving through Congress may not impose requirements for coverage of abortion, except in limited cases.

The committee approved a Democratic-written measure specifying that abortions would not be required as part of government-approved insurance benefit packages. The measure, which passed 30-28, says health plans in a new purchasing exchange aren't required to cover abortion but that each region of the country should have at least one plan that does so.

The amendment also limits the use of federal funding for abortions. Democrats cast the measure as a compromise but Republicans mostly opposed it.

Associated Press writers Erica Werner and Ricardo Alonso-Zaldivar contributed to this report.