Washington (CNN) - A deal negotiated by Senate Democrats to drop the controversial government-run public insurance option for a package of health care alternatives won praise Wednesday from President Barack Obama, but opposition from key interest groups.
In remarks at a White House event, Obama said the agreement created "a new framework that I believe will help pave the way for final passage" of what he called historic health care reform legislation.
"I support this effort, especially since it's aimed at increasing choice and competition and lowering cost," Obama said.
Earlier, White House spokesman Reid Cherlin said the senators "are making great progress and we're pleased that they're working together to find common ground toward options that increase choice and competition."
Senate Majority Leader Harry Reid, in announcing the deal late Tuesday, said negotiators reached a "broad agreement" on a package of provisions to replace the controversial public option portion of the Senate's sweeping health care bill.
However, the American Medical Association and American Hospital Association both told CNN Wednesday they oppose one part of the package that would allow people 55 and older to buy into the Medicare program for senior citizens.
"We are extremely concerned about the approach because it removes people from the private sector and puts them in government care, which is chronically underfunded," said Alicia Mitchell, a spokeswoman for the hospital association.
The public option provision has been the most divisive issue of the health care debate. Liberal Democrats call it the only way to truly reform the health care system by ensuring people have access to affordable coverage and providing low-cost competition to private insurers.
Republicans and some moderate Democrats oppose the public option, making Senate passage of a bill that contains the plan unlikely. Obama has backed the public option so far, but his statement praising the Senate deal signaled the president's willingness to compromise on a bill that lacks the provision.
- CNN's Lisa Desjardins, Dana Bash, Ted Barrett and Ed Henry
contributed to this report.