President Barack Obama has invoked his distress at the death of his grandmother to combat suggestions that his health care reforms would create "death panels" for the elderly.

The president's grandmother, Madelyn Dunham, died on election day last year after a long battle with cancer. Mr Obama discussed his anguish at her death and rejected allegations that his plans would deny care to elderly patients.

"I just lost my grandmother last year. I know what it's like to watch somebody you love who's ageing deteriorate, and have to struggle with that," Mr Obama said. "So the notion that somehow I ran for public office or members of Congress are in this so they can go around pulling the plug on grandma? I mean, when you start making arguments like that, that's simply dishonest."

The American airwaves have been inundated with claim and counter claim about the health care plans. Supporters of Mr Obama's reforms have outspent their opponents $24 million (£14.5 million) to $9 million, with the overall total being largest sum spent on a single issue campaign.

Public reservations are deep-rooted even though 47 million Americans have no health insurance.

The president's stepmother, Kezia Obama, has entered the fray by claiming that the NHS saved her life when she suffered chronic kidney failure. US media gave prominent coverage to reports that Mrs Obama fell seriously ill with kidney failure and pancreatic problems during a summer visit to Britain seven years ago. The 66-year-old, who now lives in Bracknell, Berkshire, said she could not have afforded treatment in America.

"It's very simple: I owe my life to the NHS," she said. "If it wasn't for the NHS I wouldn't have been alive to see our family's greatest moment - when Barack became president and was sworn into the White House."

Her intervention came after Republicans branded the NHS "evil" and "Orwellian".

At his town hall meetings Mr Obama introduced members of the audience who had been denied health care by insurance companies, a practice which will be banned under his reforms. "If you think that can't happen to you or your family, think again," he said.

In an article in the New York Times, he said he was confident that his drive to overhaul the US health care system would succeed. Reform was closer to reality "than we have ever been", he said, citing support from the American Nurses Association, the American Medical Association and the American Association of Retired People.

He also said there was "about 80 per cent" agreement in Congress on the shape of the reform plan that he expected to emerge as legislation.

A vigorous debate about health care was, he said, "what America's all about". But he gave warning that "in the coming weeks, the cynics and the naysayers will continue to exploit fear and concerns for political gain.

"What's truly scary, truly risky is the prospect of doing nothing. If we maintain the status quo, we will continue to see 14,000 Americans lose their health insurance every day. Premiums will continue to skyrocket. Our deficit will continue to grow. And insurance companies will continue to profit by discriminating against sick people."

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President Barack Obama says his Republican foes have no plan for health care. In fact, they do. They just don’t want to bring it up right now.

And one can hardly blame them.

The core of the conservative idea on health care is taxing health benefits. John McCain offered a version in 2008 that included a $5,000-per-family tax credit to offset the switch.

Obama brutalized McCain for his suggestion.

It was the ugliest phase of the Obama campaign, featuring a lot of scaremongering about how McCain’s plan amounted to a “trillion-dollar” tax on the middle class based on a “radical” idea that could have a “catastrophic” effect on health care.

The worst of it was a television ad warning seniors that they would lose Medicare coverage under the McCain plan, which called for savings through eliminating fraud, using electronic health records and paying doctors for good outcomes instead of procedures.

Those Medicare reforms may sound familiar because they’re essentially the same ones the president has proposed to help offset the costs of his trillion-dollar-plus health plan.

In fact, McCain’s reform weren’t that different from the ones Obama had proposed as a candidate. Obama tried to terrify little old ladies about the McCain plan while his own Web site was suggesting pretty much the same thing.

The irony now is that Obama, who once warned that McCain would cut $882 billion from Medicare and Medicaid, is trying unsuccessfully to squeeze a comparable cost estimate out of the Congressional Budget Office.

While the president accepts the McCain position on Medicare and Medicaid, taxing benefits is another matter.

Under the Republican plan, health insurance subsidies from employers would be treated as taxable income. Instead of looking at medical services as something that comes with a job, people would return to the common practice before benefits were exempted from taxes during World War II. The old model was for families to carry policies to protect against catastrophic costs from serious illness or injury and pay for the rest out of pocket.

Instead of recipients of care, Americans would return to be being consumers of health services. Imagine what would happen to the courts if every full-time worker in the land had unlimited access to legal services after paying a small deductible. Add a Byzantine set of regulations for payments and coverage, and you see why America’s hybrid health system has problems.

The disconnection between paying for and using regular medical care causes huge inefficiencies that will result in rationing. Liberals want the government to do it. Conservatives want individuals to do it by making their own decisions about what health care they need.

Aside from any ideological objections, Obama can’t accept the idea of taxing benefits because it would fall heavily on two groups with near veto power over his plan: labor unions and insurance companies.

In the current debate, the idea of taxing benefits popped up in the Senate Finance Committee. Sen. Max Baucus entertained a limited version of the plan in an effort to get some Republican support, but the White House and most of Baucus’ Democratic brethren batted it down.

The president is now coming around on the idea of taxing health benefits ... kind of.

Obama is entertaining an excise tax on insurance companies for issuing deluxe policies. If companies had to pay a 1 percent excise on each policy worth more than $40,000, it would raise an estimated $100 million to pay for some of the cost of expanding government coverage.

It’s pretty convoluted, but it recognizes that taxing benefits affects consumer behavior. Democrats argue that such a plan would help reduce overall costs by discouraging the issuance of “gold-plated” plans, which they say encourage overcharging and overspending.

The proposal is so thin that it won’t allow for a bipartisan solution, especially when coupled with a government-run insurance option.

That leaves the president little choice but to try to ram through a plan with parliamentary tricks.

But it didn’t have to be this way.

What if Obama had swallowed his pride, conceded the wisdom of McCain’s approach and asked the self-styled maverick for his help in taxing benefits? Odds are, McCain would have called for a bipartisan plan on health care and covered Obama’s back on the Hill.

In exchange for getting a market-based solution, Republicans might have accepted using the revenues to expand coverage for the uninsured.

Instead, Obama opted for the same kind of old-fashioned politics he once decried: demonize your opponent and then blame him for refusing to cooperate.

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President Barack Obama, conceding that ordinary Americans are skeptical of his plan to overhaul the nation's health care system, sought Wednesday to convince the public that the changes would benefit them and strengthen the economy.

"Reform is about every American who has ever feared that they may lose their coverage if they become too sick or lose their job or change their job," Obama said at a prime-time news conference from the East Room of the White House. "It's about every small business that has been forced to lay off employees or cut back on their coverage, because it became too expensive. It's about the fact that the biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid."

Obama used the event, the fifth full-scale White House news conference of his 6-month-old presidency, to try to reclaim a debate that has been slipping away from him in recent days.

With Republicans and some moderate Democrats on Capitol Hill balking at both the specifics of the legislation and Obama's timetable for House and Senate passage of the bills, the White House is now trying to rally legislative support and public opinion by linking health care to the nation's economic health and offering the promise of tangible benefits to Americans.

"If we do not control these costs, we will not be able to control our deficit," he said. "If we do not reform health care, your premiums and

out-of-pocket costs will continue to skyrocket." He acknowledged that Americans were anxious, saying, "Folks are skeptical, and that is entirely legitimate."

For Obama, the stakes could not be higher. Health legislation is his highest legislative priority, and his success or failure could shape the rest of his presidency. But while he is under pressure from leading Democrats to delve more deeply into the negotiations, by taking positions on specific policy issues, he largely resisted doing so on Wednesday night.

But the president did weigh in on a controversial idea percolating in the House of Representatives to tax the wealthiest Americans to help pay to extend coverage to the nation's 47 million uninsured. At first, House Democrats were weighing a tax on Americans making more than $280,000 a year; now there is talk of imposing the tax on those households earning $1 million or more, an idea Obama said he favored because it would not put the burden of paying for the bill on the middle class.

"To me, that meets my principle, that it's not being shouldered by families who are already having a tough time," he said.

Obama also signaled that he might be open to another idea under consideration in the Senate: taxing employer-provided health benefits, as long as the tax did not fall on the middle class.

On Capitol Hill, House Speaker Nancy Pelosi of San Francisco, said Democrats remained on track to reach a deal on major health care legislation. But she acknowledged that the process had slowed in response to concerns among conservative Democrats about the cost of the bill, and that some House Democrats were reluctant to embrace the income surtax on high-earners without knowing whether the Senate would go along.

Indeed, even as Pelosi insisted that Congress was closer than ever to achieving a comprehensive overhaul of the nation's health care system, Rep. Mike Ross of Arkansas, a leader of the Blue Dogs, a conservative faction of Democrats, issued a statement saying that a deal was still a long way off. And a senior Democratic aide on Capitol Hill said party leaders now believed it was essential for Obama to be more specific about what he wanted in a health care bill — and not just exhort Congress to pass one.

"The president needs to step in more forcefully and start making some decisions," said the aide, speaking on condition of anonymity because he did not want to be publicly identified as criticizing Obama. "Everyone appreciates the fact that Obama has devoted so much time to health care. The bully pulpit is powerful. But in view of the deadlines Congress has missed, we would like to hear more from the president about what he wants in this bill."

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