WASHINGTON (Reuters) - The new Democratic-led U.S. Congress on Wednesday began discussions on how to bring health coverage to millions of uninsured Americans, and heard warnings not to undercut efforts by individual states.

Since killing former President Bill Clinton's controversial proposal for universal health coverage in 1994, Congress has not fixed the problem of growing numbers of uninsured Americans and runaway health care costs.

With no progress at the federal level, states including California and Massachusetts have taken steps on their own. Nearly 47 million of America's 300 million people have no health insurance.

Sen. Edward Kennedy, a Massachusetts Democrat who favors guaranteed health insurance for all Americans, called a hearing of the Senate Committee on Health, Education, Labor and Pensions to discuss how to proceed.

Kennedy took over as chairman of the committee after Democrats regained control of Congress in November elections.

Kennedy said senators need to find common ground to deal with the problem, and noted that even if lawmakers agree on broad ideas "the devil's in the details." Kennedy said his preferred path was to extend the Medicare health insurance program to all Americans.

Senators from both parties agreed on the gravity of the problem if not the solution.

"The great hope is this is not an insolvable problem for this country," said Republican Sen. Tom Coburn of Oklahoma, who is a doctor.

'DO NO HARM'

The panel heard from witnesses from the insurance industry, business and labor. Over and over, the senators were told that Congress should not interfere with experimentation at the state level.

"Do no harm," said Peter Meade, executive vice president of Blue Cross Blue Shield of Massachusetts. "This means not advancing legislation that would undermine the efforts of the states like Massachusetts, California and Vermont that are trying to decrease costs, increase quality and improve access to health care."

Members of the committee seemed to agree.

California Gov. Arnold Schwarzenegger announced plans on Monday to require all Californians to have health insurance and to extend coverage to the state's estimated 6.5 million uninsured residents.

Under the plan, insurers would be unable to deny coverage based or age or pre-existing health conditions, healthy lifestyles would be rewarded, and the state would expand its existing health insurance for the poor.

Massachusetts last April became the first state to pass a law requiring every resident to have health insurance as part of a broader initiative to expand coverage.

California aims to join Massachusetts, Maine and Vermont in trying to provide near-universal coverage as health care costs skyrocket, the ranks of uninsured grow and employers cut benefits.

Witnesses at the hearing also urged the senators to extend a program that helps states expand health coverage to children in families earning too much to get Medicaid health insurance for the poor but not enough to buy private insurance.

Separately, a bipartisan group of lawmakers introduced legislation opposed by the White House that would allow prescription drugs to be re-imported from Canada, where they typically are much cheaper.

"Currently, the big drug manufacturers can monopoly price their medicines here, and as a result, American consumers pay the highest prices in the world for prescription drugs," said Democratic Sen. Byron Dorgan of North Dakota.