WASHINGTON (CNN) -- President Obama on Wednesday made a passionate call for Congress to fix the nation's ailing health care system in the same spirit that created Social Security and Medicare in difficult times.

President Obama told a joint session of Congress that the "time for bickering" over health care is over.

In a joint speech to Congress heralded as vital to his push for a health care overhaul, Obama offered his most detailed outline for legislation while challenging Republican opponents to build on issues of agreement rather than play politics to exploit differences.

He called for serious proposals from Democrats and Republicans to address chronic health care problems and rising costs, but warned he would not "waste time with those who have made the calculation that it's better politics to kill this plan than improve it."

"I will not stand by while the special interests use the same old tactics to keep things exactly the way they are," Obama said to growing applause from Democrats. "If you misrepresent what's in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now."

In the Republican response, Rep. Charles Boustany of Louisiana, a surgeon, called for restarting the health care debate instead of proceeding with policies he claimed were opposed by the majority of the country.

"Most Americans wanted to hear the president tell Speaker [Nancy] Pelosi, Majority Leader [Harry] Reid and the rest of Congress that it's time to start over on a common-sense, bipartisan plan focused on lowering the cost of health care while improving quality," he said.

When Obama touched on the issue of health care coverage for illegal immigrants, the president's speech was interrupted by Rep. Joe Wilson, R-South Carolina, who shouted "you lie." Members of both parties condemned the heckling and, after the speech, Wilson issued a statement apologizing for his outburst. Read about Wilson's outburst

Obama, offering his first real blueprint for a bill, touched on issues that have dominated the health-care debate at town hall meetings across the country during the congressional recess in August. CNN's political analysts respond to Obama's speech »

All Americans would be required by law to have health insurance under his proposal, Obama said. He noted the requirement would be similar to mandatory auto insurance in most states and also would mandate businesses to either offer health care coverage to workers or contribute to covering their costs of obtaining coverage.

"There will be a hardship waiver for those individuals who still cannot afford coverage, and 95 percent of all small businesses, because of their size and narrow profit margin, would be exempt from these requirements," Obama said. "But we cannot have large businesses and individuals who can afford coverage game the system by avoiding responsibility to themselves or their employees. Watch Obama talk about the time for change in health care »

"Improving our health care system only works if everybody does their part."

Obama also defended his proposal for government-run public health insurance as an option for consumers, saying it would force private insurers to lower costs. However, he called the provision one alternative for increasing competition for health insurance and signaled his openness to alternatives.

But he added, "I will not back down on the basic principle that if Americans can't find affordable coverage, we will provide you with a choice."

"And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need." Read Obama's health care plan (PDF)

Republicans are unanimous in opposing a public option, calling it an unfair competitor that would drive private insurers from the market and lead to a government takeover of health insurance. Obama rejected that claim as a false allegation intended to scare people. iReport.com: Did Obama's speech hit the mark with you?

"Let me be clear -- it would only be an option for those who don't have insurance," he said. "No one would be forced to choose it, and it would not impact those of you who already have insurance. In fact, based on Congressional Budget Office estimates, we believe that less than 5 percent of Americans would sign up."

Obama called for a reasonable approach from both liberal Democrats who demand a public option and Republicans and some moderate Democrats who oppose the provision.

"To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it," he said. "The public option is only a means to that end -- and we should remain open to other ideas that accomplish our ultimate goal.

"And to my Republican friends, I say 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." Watch Obama talk about health care failures »

Boustany, however, repeated the Republican opposition to a public option, saying: "The president had a chance tonight to take the government-run health care off the table. Unfortunately he didn't do it."

Obama also confronted another concern expressed by opponents of Democratic proposals, pledging that any health care bill approved by Congress won't increase the federal deficit. He repeated past statements that savings in the existing health care system would cover most of the cost of an overhaul bill. Watch more on the health care debate »

The president also sought to assure the elderly that cutting costs and finding savings in the Medicare program for senior citizens won't diminish the level of service currently provided. In particular, he said "not a dollar of the Medicare trust fund" would pay for the bill.

However, Obama provided few details of how that would happen, saying the plan would eliminate "unwarranted subsidies in Medicare that go to insurance companies" and create an independent commission of doctors and medical experts to identify further waste.

"These steps will ensure that you -- America's seniors -- get the benefits you've been promised," Obama said. "They will ensure that Medicare is there for future generations."

He urged the elderly to ignore what he called "scary stories about how your benefits will be cut -- especially since some of the same folks who are spreading these tall tales have fought against Medicare in the past."

In a gesture intended to display his commitment to a bipartisan approach, Obama directed his administration to set up demonstration projects in several states to move toward medical malpractice reform -- an issue pushed by Republicans as way to bring down health care costs.

His mere mention of the topic prompted lengthy applause from the Republican side of the chamber.

"I don't believe malpractice reform is a silver bullet, but I have talked to enough doctors to know that defensive medicine may be contributing to unnecessary costs," Obama said.

He proposed demonstration projects -- considered by the Bush administration -- "on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine."

McCain, however, called Obama's reference to medical malpractice reform insufficient.

"Frankly, some tests on medical malpractice reform doesn't get it," McCain told CNN after the speech. "Hundreds of billions of dollars have been wasted in defensive medicine."

In an emotional conclusion, Obama invoked the late Sen. Edward Kennedy -- a leading advocate of health care reform until his death last month -- by citing a letter in which the senator called providing health care to all Americans "above all a moral issue." Read what Sen. Ted Kennedy wrote to Obama about health care in May

" 'At stake are not just the details of policy, but fundamental principles of social justice and the character of our country,' " the president said, quoting the letter that Kennedy wrote in May and asked to be delivered after his death.

"I've thought about that phrase quite a bit in recent days -- the character of our country," Obama said to the hushed chamber. "One of the unique and wonderful things about America has always been our self-reliance, our rugged individualism, our fierce defense of freedom and our healthy skepticism of government."

Kennedy recognized, however, that with all of the drive of Americans to stand strong, there comes a time when government must step in to help, Obama said.

"When fortune turns against one of us, others are there to lend a helping hand," the president said, citing "a belief that in this country, hard work and responsibility should be rewarded by some measure of security and fair play; and an acknowledgment that sometimes government has to step in to help deliver on that promise."

Initial public response among those who watched the speech was positive, according to a CNN/Opinion Research Corporation poll. Two out of three Americans who watched the speech said they favor Obama's health care plans -- a 14-point gain from before the speech -- while 29 percent oppose the president's proposals, according to the pollsters.

However, the audience for the speech appeared to be more Democratic than the U.S. population as a whole, causing the poll organizers to warn the results may favor Obama simply because more Democrats than Republicans tuned in.

In addition, the pollsters noted, the results don't reflect the the views of all Americans, only those who watched the speech.

CNN's Ed Hornick, Ed Henry, Suzanne Malveaux and Dana Bash contributed to this report.

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