By John McCormick and Mike Dorning, Tribune staff reporters

John McCormick reported from Iowa City and Mike Dorning from Washington

IOWA CITY -- Sen. Barack Obama on Tuesday sought to address an issue that polls show greatly concerns voters, as he offered a health-care plan that pledged to insure all children and provide better access to health insurance for adults by lowering costs.

The presidential candidate and Illinois Democrat placed himself in the center of his party's mainstream with a plan that relies heavily on the promise of cost savings through a big investment in technology but also would be funded in part by allowing President Bush's tax cuts for the wealthiest Americans to expire.

The proposal is not quite as sweeping as that offered by former North Carolina Sen. John Edwards, experts said, while Sen. Hillary Rodham Clinton (D-N.Y.) has not yet offered a fully fleshed-out plan.

But ultimately, all three of the top Democratic candidates are likely to offer proposals that will seek to cover the vast majority of the estimated 45 million uninsured, as they seek to tackle an issue that resonates nationwide.

"The senator came across with a large plan, but in Democratic presidential terms it's a centrist plan," said Robert Blendon, a professor of health policy at the Harvard School of Public Health. "He's talking about something that takes the existing system and makes it work."

Keeping employer insurance

Like Edwards, Obama would preserve the current employer-based health insurance system and so reduce the risk of stirring opposition from those who are satisfied with their health coverage. By emphasizing steps to lower the cost, Obama also offered something for voters who are primarily worried about the affordability of maintaining their existing insurance.

Obama portrayed his plan as one that would spread responsibility while using technology to cut costs.

"To help pay for this, we will ask all but the smallest businesses who don't make a meaningful contribution today to the health coverage of their employees to do so," he said at the University of Iowa's medical campus. Companies that do not provide health insurance would be charged a payroll tax to help fund subsidized insurance.

But Obama stopped short of mandating that all Americans be required to have insurance. Massachusetts has adopted such a mandate for health insurance under a statewide universal health plan that takes effect in July. Edwards' plan also calls for all Americans to obtain health insurance.

Obama would require that families buy coverage for their children. But adult participation would be voluntary, though all Americans would be eligible for health insurance similar to the options now offered to federal employees, with rates based on their income.

Leaving open the option of forgoing insurance makes his plan fall short of true universal coverage and, some experts said, likely would leave many without insurance.

In response, Edwards spokesman Mark Kornblau said, "Incremental measures are not enough. Any plan that does not cover all Americans is simply inadequate."

But those who worked with Obama to put the proposal together said making the system more affordable means more people would buy into it, moving the country closer to universal coverage.

The financing of Obama's plan depends heavily on often-elusive cost savings, which he said would result in the average family saving $2,500 a year in insurance premiums.

Obama's proposal would leave the private insurance system in place but create a government-run National Health Insurance Exchange for those who want to buy private insurance. The entity would also act as a watchdog over insurance companies and their coverage.

Those who could not afford to buy their own insurance would get a subsidy on a sliding scale depending on their income.

Campaign officials said the proposal would require $50 billion to $65 billion per year of new federal funds when fully phased in. They said the revenue could be raised by eliminating the Bush tax cuts for families making more than $200,000 per year, eliminating lower tax rates for dividends and capital gains, and maintaining the inheritance tax for estates valued at more than $7 million.

The speech was the latest in a series of policy presentations Obama has given in recent weeks as he seeks to put to rest suggestions that his candidacy for the Democratic nomination is based more on celebrity than experience and substance.

As part of his plan, Obama would also call for the federal government to pay for the cost of some catastrophic care, which he said would help reduce insurance costs and premiums for Americans. "Two out of every 10 patients account for more than 80 percent of all health-care costs," he said.

Clinton: Obama late to table

Clinton, meanwhile, delivered her own policy proposals on health care late last week. Like Obama, Clinton focused much of her attention on reining in costs. She is expected to give at least two more speeches on the topic in the coming months that will address quality of care and insurance.

In response to Obama's proposal, Clinton's campaign issued a statement that suggested he was late coming to the table on an issue that she has been deeply involved in since presiding over the Clinton administration's failed attempt to pass a national health insurance plan in the 1990s.

Edwards became the first top-tier Democratic presidential candidate to release a detailed health-care plan in February and has sought to make it a staple of his campaign. He has said he would need to raise taxes to pay for his plan to insure all Americans at a cost of about $100 billion a year.

With other issues such as immigration and terrorism commanding greater attention on the Republican side, GOP candidates have not yet offered detailed health-care plans.

Obama's wife, Michelle, who works in the health-care industry, did not help write his plan, a campaign official said, but her professional experience over the years is part of his understanding of the industry's problems.

As costs have grown, polls show that health care is an increasingly important topic for Americans, including the 15 percent of the population without coverage.

A recent Kaiser Family Foundation survey showed it ranks second behind the Iraq war for important problems for the government to address.

"It's a big, comprehensive plan that puts the financing on the table. That's always the big litmus test," Drew Altman, president of the Kaiser Family Foundation, said of Obama's plan.

"The Democratic plans all build on the employer-based health-care system and existing public programs," he said. "We haven't seen all the pieces of Sen. Clinton's health-care plan yet. But the similarities are likely to be more important than the differences."

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Where the candidates stand on health care

DEMOCRATS

Delaware Sen. Joseph Biden: Wants to expand health insurance for children and for catastrophic care, look to states for ideas on moving toward universal coverage.

New York Sen. Hillary Rodham Clinton: Seeks national consensus before proceeding with universal health-care plan. Has offered proposal to rein in health costs and is expected to offer other plans aimed at insuring all Americans.

Connecticut Sen. Christopher Dodd: Sponsored bill to expand coverage for young, old and poor. Favors universal coverage.

Former North Carolina Sen. John Edwards: Wants to achieve universal health coverage by 2012 with expanded federal health insurance, family tax credits, and coverage requirements on employers, insurance companies and individuals. Would increase taxes to pay for program's cost of up to $120 billion a year.

Former Alaska Sen. Mike Gravel: Supports a government-funded national health-care voucher plan.

Ohio Rep. Dennis Kucinich: Favors national health insurance program covering medical, dental, mental health and long-term care, as well as prescription drugs.

Illinois Sen. Barack Obama: Pledges to insure all children and provide better access for adults by lowering costs through investment in technology and expiration of tax cuts for the wealthiest Americans. Stops short of mandating universal coverage.

New Mexico Gov. Bill Richardson: After numerous reforms, all Americans would be required to obtain coverage.

REPUBLICANS

Kansas Sen. Sam Brownback: "Market-based solutions, not government-run health care."

Former Virginia Gov. Jim Gilmore: Says some Republican foes are too liberal on health care.

Former New York Mayor Rudolph Giuliani: "Market-driven" expansion of coverage, not government-led universal coverage.

Former Arkansas Gov. Mike Huckabee: Favors market solutions, state innovation. Opposes universal government coverage.

California Rep. Duncan Hunter: Supported health coverage expansion through tax breaks, not government-led universal plan.

Arizona Sen. John McCain: Has a record of promoting prescription drug coverage for elderly and expanded insurance for children, but not universal coverage.

Texas Rep. Ron Paul: Says government policies restrict free market and keep health-care costs high.

Former Massachusetts Gov. Mitt Romney: As governor, signed health-care law aimed at ensuring universal coverage through a mix of subsidies, sliding scale premiums and penalties for those who do not get insurance.

Colorado Rep. Tom Tancredo: Wants market reforms instead of more federal spending to expand health coverage.

Former Wisconsin Gov. Tommy Thompson: Supports system centered on preventive medicine, rather than curative. Proposed requiring states to organize purchasing pools among uninsured.

Sources: Tribune staff and news services, candidates' statements