WASHINGTON — Scolding, cajoling and explaining, President Obama yesterday portrayed health care reform as a test of the nation's character, arguing that the status quo is unsustainable for both the economy and the well-being of millions of Americans.

In a 50-minute speech to a rare joint session of Congress, Obama gave qualified support to his most controversial proposal, a government-run insurance option, while offering a modest olive branch to Republicans on medical malpractice reform.

Obama offered no new sweeping plans, saying he prefers to improve the current system "rather than build a new system from scratch." That was a recognition of rising fear and doubts about his plan's scope and intentions, which Obama said had been whipsawed by "scare tactics" and rampant partisanship.

The president tried to reassure seniors that cuts aimed at Medicare are aimed at waste, not their coverage.

And he addressed two of the most contentious criticisms of his plan.

He said the claim that he supports government "death panels" denying care for seniors is "a lie, plain and simple." Addressing another attack line, he said, "No federal dollars will be used for abortions."

Some argue that Obama should have given this speech months ago, when Congress first began crafting reforms for an industry that encompasses one-sixth of the economy, and when he could have defined the debate before critics began picking it apart.

One Obama line — "the plan I'm announcing tonight" — may seem belated and off-key after months of intensifying debate on his 10-year, $900 billion plan.

Obama told Americans that any plan he signs will:

• ban insurance companies from denying coverage because of pre-existing conditions;

• prevent insurers from dropping or watering down coverage during illness;

• end arbitrary annual or lifetime coverage caps;

• limit out-of-pocket expenses;

• require insurers to cover routine checkups, mammograms and colonoscopies.

"I am not the first president to take up this cause," Obama said, "but I am determined to be the last."

GOP SAYS START OVER

Rep. Charles Boustany Jr. of Louisiana, giving the Republican response to Obama's address, urged Democrats to abandon their "government-run" approach and "start over."

"Replacing your family's current health care with government-run health care is not the answer," Boustany said. "In fact, it'll make health care much more expensive."

Boustany, a cardiovascular surgeon for more than 20 years, said "the president had a chance tonight to take government-run health care off the table. Unfortunately, he didn't do it."

Most Americans want Obama and Congress to "start over with a common-sense bipartisan plan focused on lowering the cost of health care while improving quality," he said.

'PARTISAN SPECTACLE'

Obama said the health care system is at a "breaking point." He complained that while Congress was ready to pass about 80 percent of the reforms he wanted, the rest had been held up by "partisan spectacle."

"The time for bickering is over," Obama said. "The time for games has passed. Now is the season for action."

But in a sign of how far this plan is from passage, some lawmakers broke into laughter when Obama said there are "significant details to be ironed out." And in a breach of decorum that caused a gasp, a congressman in the audience shouted "You lie!" when Obama said that his health care reform proposal would not apply to illegal immigrants.

Democrats cheered the loudest when Obama pointed out that he had inherited huge deficits from President George W. Bush. Republicans were the most enthused about tort reform.

Obama tried to reassure those who already have health insurance, saying that "nothing in this plan will require you or your employer to change the coverage or the doctor you have."

In defending the controversial "public option," Obama took a middle course. He said "it is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles."

He told liberals that the public option is "only a means to an end," designed not to drive insurance companies out of business, but to "make coverage affordable for those without it." He told Republicans that "rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have."

'WE WILL CALL YOU OUT'

Obama said that doing nothing on health care would grow the deficit even more.

"More families will go bankrupt," he said. "More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result."

Obama is including a proposal from his Republican rival last year — to offer Americans who can't get insurance because they have pre-existing medical conditions low-cost coverage to protect them against financial ruin if they get seriously ill.

Obama said it was a "good idea" when Sen. John McCain proposed it during the presidential campaign. He adds that it's still a good idea, and "we should embrace it."

Amid applause from his colleagues, McCain smiled and gave Obama a thumbs-up.

Obama, however, warned that he will not tolerate the strategy of "death by delay" articulated by some GOP strategists.

"I will not stand by while the special interests use the same old tactics to keep things exactly the way they are," he said. "If you misrepresent what's in the plan, we will call you out."