Sen. Tom Harkin, D-Iowa, said the measure reduces costs, protects choice, assures coverage and "begins to change our system to be a healthcare system instead of a sick-care system."
"It is the right prescription for what ails this country right now," Harkin said during a news conference after the vote.
The bill, which the Health, Education, Labor and Pensions Committee passed on a 13-10 vote, doesn't include the tax increases a House version contains. Several key Senate Democrats have said the tax increases called for in the House version won't fly in the upper chamber.
President Barack Obama, who has tied healthcare reform to the nation's economic recovery, praised the HELP committee's work, saying it produced a proposal "that will finally lower healthcare costs, provide better care for patients, and ensure fair treatment of consumers by the insurance industry."
The Senate Finance Committee still is marking up its version of the healthcare reform legislation.