Obama's other goals, such as a broad expansion of health insurance coverage, would cost even more.
The president and his allies on Capitol Hill have talked of spending money on new initiatives that would make the healthcare system more efficient, such as incentives to reduce duplicative and unnecessary care.
But many analysts say the federal government will have to continue to increase spending for years to come before it begins to reap any savings from a redesigned system.
The healthcare system is "a big ship that's not moving that fast, but it is very big and it's very hard to turn," Congressional Budget Office Director Douglas W. Elmendorf told the Senate Finance Committee on Wednesday.
About half of the money that Obama wants to raise for a healthcare overhaul would be generated through changes in the way that the wealthiest Americans itemize deductions for charitable donations, state taxes or interest payments on a home.
Under the president's proposal, joint filers making more than $250,000 a year would only recoup 28% of the value of qualified deductions, rather than higher percentages laid out under current law.
That could mean a couple in the 35% tax bracket who once could have recouped $3,500 of a $10,000 donation to a charity would now recoup only $2,800.
The White House estimates the change would generate about $318 billion over 10 years.
The remaining money in the president's plan would be generated largely from changes in the way the federal government pays for healthcare through Medicare and Medicaid, its two primary public insurance programs.
By creating a new competitive bidding process, Obama plans to cut payments to insurance companies that currently contract with the federal government to provide care to senior citizens on Medicare.
Studies have found that this program -- known as Medicare Advantage -- ends up costing the government substantially more than the traditional fee-for-service program, making it a favorite target for congressional Democrats, who have called it a giveaway to industry.
A new bidding process could generate more than $170 billion over the next decade, according to the administration.
The president also wants to speed federal approval of generic drugs derived from biological rather than chemical processes -- known as biologics -- a move that could save money for public and private insurance.
