[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2009/images/12/08/art.reid1208.gi.jpg caption="At the request of Senate Majority Leader Harry Reid, a group of ten moderate and liberal Senate Democrats are meeting to try to hash out their differences on health care reform."]
Washington (CNN) - Liberal and moderate Senate Democrats said Tuesday they were continuing negotiations on a package of alternatives to a government-run public health insurance option in the chamber's sweeping health care bill.
The negotiating senators said the ideas under discussion would replace the controversial public option in a compromise intended to win the support of the chamber's entire Democratic caucus.
Senate Republicans unanimously oppose the health care bill so far, and it will require support from all 60 members of the Democratic caucus for it to pass.
"I think we know where the fault lines are," said Sen. Russ Feingold of Wisconsin, one of the liberals in the talks. "Still, at this point, but they're not necessarily easy ones to overcome. Things have been narrowed, but there are still very significant issues."
Sen. Charles Schumer of New York, who is leading the negotiations, said the talks would continue throughout Tuesday in the face of remaining "bumps in the road."
"There are many bumps in the road because everyone's giving," Schumer said. "Again, the overall framework, the way I put it is: some in our caucus want more government involvement, some in our caucus want less government involvement. The question is, how do you thread that needle?"
Senate Majority Leader Harry Reid, who asked for the talks involving five liberal and five moderate Senate Democrats to work out differences on key health care issues, wanted an agreement by Tuesday. Participants said they were working to meet that deadline, but offered no promises.
"It may be a triumph of hope over experience, but I'm a hopeful person," said Sen. Tom Carper of Delaware, one of the moderates involved in the talks.
On Monday, Iowa Sen. Tom Harkin conceded that any resulting compromise was unlikely to make anyone happy.
"Is it something that I like? No," said Harkin, a liberal. "It isn't something moderates or conservatives like either. It's one of those things in the middle that doesn't make everyone happy."
Asked if he could live with it, Harkin said: "It's something I'm probably going to have to live with."
An alternative to the public option strongly opposed by some moderate Democrats is the main focus of the talks that began last week.
According to an aide to one of the senators involved in the talks, one provision under discussion would have private insurers seek approval from the government's Office of Personnel Management to provide coverage for people in state insurance exchanges being created by the bill.
Currently, private insurers must get such approval to offer coverage in the federal health insurance program for government workers.
By participating in the exchanges, the private insurers would limit their profits, just as they do for taking part in the federal workers' plan, according to the senator's aide. The fee-for-service plans for federal workers can earn private insurers a service charge of up to 1 percent, with the average charge being about 0.75 percent.
The senator's aide said the goal is to create low-profit or non-profit competition for private insurers that public option supporters contend is vital for real health insurance reform.
Such an alternative to the public option would avoid the government-funded or government-run label opposed by moderate Democrats, while providing liberal Democrats the lower-priced competition they seek.
Meanwhile, some of the senators in the talks said another idea is to allow Americans to buy into Medicare starting at age 55. Currently, Medicare coverage for senior citizens begins at age 65, with some exceptions.
The idea appeals to liberal Democrats seeking to expand health coverage to more Americans, and could offset their opposition to a bill that lacks a full public option as originally proposed.
However, issues of when to implement the lower age for Medicare eligibility and how to pay for it were still being worked out, according to sources close to the talks.
Other ideas in the package under discussion include expanding the Medicaid program more than currently called for in the bill, and expanding a proposal in the bill that gives money to states to allow them to cover
low-income people through existing programs instead of Medicaid, the senator's aide said.
Senators taking part in the talks include Schumer and liberals Feingold, Harkin, Jay Rockefeller of West Virginia and Sherrod Brown of Ohio, along with moderates Carper, Ben Nelson of Nebraska, Mark Pryor of Arkansas, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas.
The Democratic caucus contains 60 seats in the 100-member chamber, which is the minimum number needed to overcome a filibuster. If any Democratic caucus members balk at the public option, the party would need some Republicans to back the bill in order for it to pass.
–CNN's Ted Barrett contributed to this story.