Negotiators on the U.S. Senate Finance Committee worked to pare the costs and complete the details of a broad healthcare overhaul on Monday, with chairman Max Baucus saying he was still on track to produce a bill this week.

Baucus said the latest Congressional Budget Office report put the cost at $880 billion over 10 years, less than earlier estimates, and he still hopes to win Republican support for President Barack Obama's top domestic priority.

We are working to bring this process to closure over the next week or so, Baucus told reporters after a session of the so-called Gang of Six negotiators -- three Republicans and three Democrats who have been meeting for months.

The negotiators are running out of time to reach agreement on the legislation, which is expected to form the backbone of any ultimate congressional compromise.

Baucus said he still expected to make the bill public this week and that the committee would vote on it next week -- with or without Republican support.

Senator Olympia Snowe, one of three Republican negotiators and the focus of Democratic hopes for support, said she was not prepared yet to back the legislation.

We can't say that yet. We're still working through a number of issues and there are others remaining, she said.

Obama, a Democrat, says the overhaul of the $2.5 trillion U.S. healthcare industry should cut costs, improve care, regulate insurers to protect consumers and expand coverage to many of the 46 million Americans without any health insurance.

Three House of Representatives committees and one Senate committee have finished work on a healthcare bill, leaving the Senate Finance panel as the final hurdle before each chamber takes up the issue.

Negotiators focused on Medicaid, medical malpractice and immigration issues at Monday's first session. Baucus said the plan's expansion of Medicaid, the federal healthcare program for the poor, would cost states less than they expected.

STATES TO BE 'PLEASANTLY SURPRISED'

States are going to be pleasantly surprised that they will have some additional costs but much less than they originally thought, Baucus said.

Negotiators hope to discuss the issue with state governors on Tuesday.

A late afternoon session on Monday focused on ways to ensure that no taxpayer funds are used to fund abortions under the plan, Democratic Senator Kent Conrad told reporters.

Democratic Senator Bill Nelson said he was confident the Democratic-controlled Senate would pass a comprehensive healthcare overhaul with at least 60 votes -- the number needed to prevent Republicans from procedurally blocking the bill.

I am very optimistic, he told reporters before an evening meeting of Democrats on the Finance Committee.

The Baucus plan would create nonprofit cooperatives to compete with insurance companies instead of a government-run insurance plan -- the public option -- sought by liberal Democrats and backed by Obama.

The public option has come under fire from critics concerned it would hurt insurance companies and give government too broad a role. But many liberal House Democrats say it will foster increased competition and they will not support a plan without it.

While Obama backs a government-run option, he has signaled it is not essential to help meet his goal of expanding coverage to the uninsured.

The Baucus plan under discussion by negotiators would tax insurance firms on their most expensive healthcare policies and levy a fee on companies that would raise about $6 billion a year to help pay for the plan.

It also would offer tax credits on a sliding scale for individuals and families starting in 2013 to offset the cost of private plan premiums and would provide tax credits tosmall business.

Democrats have been pushing Baucus to move forward even if he cannot win over any of the three Republican negotiators -- Snowe, Charles Grassley and Mike Enzi.

Enzi and Grassley were critical of Obama's plans during the congressional recess in August, dimming hopes they would be included in an ultimate compromise and prompting the White House and other Democrats to focus on Snowe.

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