Now comes the really hard part.

After a brief celebration of House passage of landmark health legislation, House and Senate Democrats and President Barack Obama face weeks, if not months, of difficult negotiations in constructing a final package that will win congressional approval.

Their challenge: Despite months of debate, disputes remain between liberal and moderate Democrats and between the House and the Senate on a raft of core issues. They include how much to spend on an overhaul; how to pay for it; how to deal with a government-run insurance option, and the scope of coverage and subsidies for the uninsured.

One thing is clear: The House-passed bill is almost certainly the high-water mark of liberal aspirations. On most issues, Democrats will likely have to tack to the right to win the support of Senate moderates. House Speaker Nancy Pelosi’s acquiescence on more-restrictive abortion language showed just how far party leaders are prepared to go to push through the legislation.

The House bill, which would cost $1.1 trillion over a decade, passed late Saturday on a vote of 220 to 215. Like the $829 billion Senate Finance Committee bill, which is likely to be the template for that chamber’s legislation, the House legislation requires, for the first time, that most people have health insurance.

But compared to the Senate Finance bill, the House bill would cover more uninsured (eventually 36 million versus 29 million); offer bigger subsidies for individuals and families to buy coverage on new exchanges, or marketplaces; provide for a bigger Medicaid expansion, and use a markedly different financing scheme for a big chunk of the cost (a tax on wealthy Americans versus a levy on high-cost insurance plans.)

Now, as Senate Majority Leader Harry Reid, D-Nev., cobbles together legislation, he must maintain liberal support while winning over a handful of wavering moderates — including Ben Nelson of Nebraska, Evan Bayh of Indiana, Blanche Lincoln of Arkansas and independent Joseph Lieberman of Connecticut – to rack up the 60 votes needed to thwart a Republican filibuster.

Ultimately, because of the struggle to get those 60 votes, any bill passed by the Senate will enter House-Senate negotiations with a leg up, and perhaps form the foundation of a final Capitol Hill deal. “I don’t see it any other way,” said Nelson.

Forks in the Road

Among the outstanding questions in putting together a House-Senate bill: 

• Will the Democratic leadership try to hold the bill’s price tag to $900 billion over 10 years, as requested by Obama, or adjust the cost up or down to address the sometimes-conflicting demands of the party’s rank and file?
• Will Democrats feel compelled to go with the House’s more ambitious coverage proposals, or endorse the Senate’s more modest ones?
• Will liberal Democrats prevail in including the House version of the public option, or bow to Reid’s idea that states should be allowed to opt out? It’s also possible a final bill would go in another direction, and trigger a public option only under certain conditions.

“They’ve (the House and Senate) really kind of taken two different forks in the road on health reform,” said Republican Rep. Dave Camp of Michigan. “This is very complicated, it’s a long way from being over and many of these provisions are integrated with one another. You can’t just pick and choose off a list and slap it together.”

Chip Kahn, president of the Federation of American Hospitals, predicted the House and Senate eventually would reach agreement, but added, “I have trouble visualizing what it will look like.”

“The entire revenue structure of both bills is different,” he said. “The way they approach Medicare Advantage is different, and that has a lot of regional implicationsThere are a lot of substantive differences.” Medicare Advantage is the part of Medicare where private insurers provide benefits to seniors.

Some political observers say recent Republican victories in the Virginia and New Jersey gubernatorial elections might make it more difficult for moderate-to-conservative Democrats from swing states to back ambitious health care legislation.

Feeling Conflicted

But at the same time, some senators admit to feeling conflicted about the size of the bill. While they want to contain overall spending, they also want to make sure that low- and middle-income constituents will be able to afford the mandatory insurance.

“Affordability is important, very important,” said Finance Committee Chairman Max Baucus, D-Mont. “We have to balance what’s the total cost of the bill, number one, then…keep premium costs low, keep out-of-pocket costs low and coverage high…It depends at least in a significant part on the total cost of the bill.”

Drew Altman, president and chief executive officer of the Kaiser Family Foundation, predicted there would be renewed attention to the affordability issue as the legislative process moves ahead. “What will be the deal for middle-class voters – which is always politically sensitive – who have to buy insurance in the exchange?” he said.

Concerns about that question, he added, are “going to create some upward pressure” on the cost of the legislation. “Policy makers have been in the unenviable position of having to struggle with the tradeoff between the cost of the legislation and the generosity of both the subsidy and the adequacy of the underlying [insurance] coverage.” KHN is a part of the foundation.)

Key Differences 

Here are some key differences between the main bills pending in Congress:

The Price Tag: With an overall cost of $1.1 trillion over the next decade, the House-passed bill is more expensive than either the legislation approved by Senate Finance or by the Senate Health, Education, Labor and Pensions Committee. Some health care analysts and lawmakers say a final House-Senate conference package would have to come closer to the $829 billion Finance bill to survive a final vote in the Senate. In a speech to a joint session of Congress in September, Obama “said first, he wanted a bipartisan bill. Second, he wanted a $900 billion bill or at about that level,” Baucus said. “That level is important.”

How to Pay for the Bill: The House bill would impose a 5.4 percent income surtax on individuals earning more than $500,000 and couples earning more than $1 million. That idea is unpopular in the Senate. The Finance plan, meanwhile, would slap a $6.7 billion annual fee on health insurers, based on their market share, and place a 40 percent excise tax on the highest-cost health insurance plans-a move economists say could help curb demand for such plans and for overused health services. That proposal has been rejected by House Democrats because of vociferous opposition from labor unions, which argue many workers made wage concessions in order to obtain or keep their health care coverage.

The bottom line: Democrats “are on different planets when it comes to payfors,” said Camp.

The Public Plan: While House progressives pushed for a robust public plan with payments tied to Medicare rates, party members from rural areas balked, saying their doctors and hospitals already are underpaid by Medicare and wouldn’t survive. The upshot: The House included a public plan that calls on the government to negotiate rates with health care providers.

The Finance bill doesn’t include a public plan of any sort, but Reid has said he would include one in any Senate measure, and give states the right to opt out if they didn’t want to take part. But ultimately, some analysts say, the Senate might take another route, approving a proposal touted by Republican Sen. Olympia Snowe of Maine that would create a public plan only in states where affordable private insurance wasn’t available to 95% of a state’s residents. Progressives in both chambers will push back hard against that approach, but might have to live with it to get legislation to Obama’s desk.

Coverage and Subsidies: Both the House and Senate Finance bills would require most people to have insurance. And both would provide subsidies to buy coverage to people with incomes of up to 400 percent of the federal poverty level, or about $88,000 for a family of four. But they would do it in different ways.

For example, under the House Democrats’ plan, a family of four earning $54,000 a year would pay $6,200 or 11 percent of their income on premiums and out-of-pocket costs, according to an analysis by the Congressional Budget Office and Joint Committee on Taxation. Under the Finance bill, that same family would pay $9,900 or 18 percent of income. As income levels increase the subsidy levels of the bills become more similar. For a family of four with income of $90,100, both bills would require the family to spend $16,600 or 18 percent of their income.

In another difference, the Finance Committee’s penalties for individuals who don’t carry coverage are weaker than those in the Senate health or House bills. Health insurers fear that would mean that some people would wait to buy health insurance until they got sick, driving up costs and premiums.