The U.S. House of Representatives narrowly passed a health-care reform bill Saturday night, a major step in the attempt to overhaul the system.

"Thanks to the hard work of the House, we are just two steps away from achieving health insurance reform in America," President Barack Obama said in a written statement.

"Now the United States Senate must follow suit and pass its version of the legislation. I am absolutely confident it will."

The bill passed by a vote of 220 to 215, with all Republicans except Louisiana's Joseph Cao and 39 Democrats voting against the proposed legislation. Democrats, who hold 258 seats, needed 218 votes to pass the bill.

The landmark legislation would extend health insurance to tens of millions of uninsured Americans and enact dramatic changes to the country's medical system.

The bill would cost $1.2 trillion US over the next decade and require most employers to offer health coverage to their workers and prohibit insurance companies from denying coverage based on a person's medical history.

The bill includes a public health insurance option, but if people like their current plans, they would be able to keep them.

For individuals not currently covered by their employer, and some small businesses, the legislation would establish a new health insurance exchange where consumers could comparison-shop.

Options available

They would be able to choose from several options including private plans, health co-ops and a new government health insurance plan.

The legislation would require most Americans to carry insurance and provide federal subsidies to those who otherwise could not afford it. Both consumers and companies would be slapped with penalties if they defied the government's requirements.

In the opening moments of the debate, Democrats hailed the legislation as an advance for the country's social fabric and a moral and economic imperative.

But Republicans said it would be a government takeover of the health-care system that would damage the economy and erode the doctor-patient relationship.

The passage of the House bill still faces hurdles. The Senate is working on its own version of a health-care bill, but approval will be more difficult because Democrats need 60 out of 100 votes to end debate and bring legislation to a final vote.

Several moderate Democratic senators have already voiced their concerns about cost and the public option.

If the Senate does pass a bill, it would have to be reconciled with the House version by a panel of legislators from both chambers before the legislation is put up for final approval.

Earlier Saturday, Obama urged the House of Representatives to "answer the call of history" by passing the bill.

"This is our moment to live up to the trust that the American people have placed in us, even when it's hard — especially when it's hard," Obama said before the bill cleared its first hurdle in the House, when Democrats approved a procedural measure setting the terms for Saturday's debate.

"This is our moment to deliver," the president said. "I urge members of Congress to rise to this moment. Answer the call of history and vote Yes for health insurance reform for America."

With files from The Associated Press