Senate approves landmark healthcare overhaul

WASHINGTON (Reuters) - The Senate approved President Barack Obama''s landmark healthcare overhaul on Thursday, backing sweeping changes in the medical insurance market and new coverage for tens of millions of uninsured Americans.

On a party-line 60-39 vote, Senate Democrats supported the most dramatic shifts in health policy in four decades. The early-morning Christmas Eve vote followed months of political wrangling that consumed the U.S. Congress and put a dent in Obama''s public approval ratings.

The vote clears the way for tough negotiations in January with the House of Representatives, which approved its own version on November 7 that features different approaches on taxes, abortion and a proposed new government-run insurance program.

"With today''s vote we are now incredibly close to making health insurance reform a reality in this country," Obama said after the Senate took a major step toward a goal that has eluded Democrats since former President Bill Clinton''s failed attempt in 1994. "Our challenge then is to finish the job."

Once House-Senate negotiators agree on a single bill, each chamber must approve it again before sending it to Obama to sign into law. Republicans promised to continue the battle.

"This fight is long from over," Republican Senate leader Mitch McConnell said. "My colleagues and I will work to stop this bill from becoming law."

The Christmas Eve Senate session -- the first since 1895 -- fulfilled a pledge by Senate Democratic leader Harry Reid to pass the bill before Christmas. Republican opponents delayed the final vote to the last day possible under Senate rules, but agreed to an early-morning vote to let people head home.

Senators called out their votes from their desk in a formal roll-call. Reid, who has been working around the clock during four weeks of Senate debate, mistakenly voted "no" when his name was first called before voting for the bill.

That prompted a roar of laughter in the chamber. Reid smiled and dropped his head on his desk in embarrassment.

"This is for my friend Ted Kennedy," 92-year-old Democratic Senator Robert Byrd said as he voted "yes." Kennedy, who championed healthcare reform during his long Senate career, died in August of brain cancer.

Obama called Kennedy''s widow Vicki after the vote to congratulate her, the White House said. He also called a dozen senators to thank them, including Reid.

After the vote, the S&P Managed Health Care index of large U.S. health insurers closed 0.3 percent lower. Health insurer stocks have soared about 25 percent since the start of October.