But Obama has asked Reid to strike a provision that would send $1.1 billion in extra Medicaid funding to Massachusetts and Vermont -- states that have already expanded Medicaid coverage but would otherwise not be reimbursed at the same level as states that would boost their Medicaid populations for the first time under the bill's mandate.

"What I told Harry Reid is that Vermont does the right thing, and I don't want Vermont to be penalized for doing the right thing," Sen. Patrick Leahy (D-Vt.) said in a statement.

Through a spokeswoman, Sen. John Kerry (D-Mass.) said he, too, was working with the president "to make sure Massachusetts's past investment to expand health coverage to low-income individuals is recognized in health reform."