The 60-39 vote on a cold winter morning capped months of arduous negotiations and 24 days of floor debate. It also followed a succession of failures by past congresses to get to this point. Vice President Joe Biden presided as 58 Democrats and two independents voted "yes." Republicans unanimously voted "no."
The tally far exceeded the simple majority required for passage.
The Senate's bill must still be merged with legislation passed by the House before Obama could sign a final bill in the new year. There are significant differences between the two measures but Democrats say they've come too far now to fail.
Both bills would extend health insurance to more than 30 million more Americans.
Vicki Kennedy, the widow of the late Massachusetts Sen. Edward Kennedy, who made health reform his life's work, watched the vote from the gallery. So did Rep. John Dingell, D-Mich., the longest-serving House member and a champion of universal health care his entire career.
"This morning isn't the end of the process, it's merely the beginning. We'll continue to build on this success to improve our health system even more," Majority Leader Harry Reid, D-Nev., said before the vote. "But that process cannot begin unless we start today ... there may not be a next time."
At a news conference a few moments later, Reid said the vote "brings us one step closer to making Ted Kennedy's dream a reality."
The Nevadan said that "every step of this long process has been an enormous undertaking."
Sen. Max Baucus, D-Mont., chairman of the Finance Committee, said he "very happy to see people getting health care they could not get."
It was the Senate's first Christmas Eve vote since 1895, when the matter at hand was a military affairs bill concerning employment of former Confederate officers, according to the Senate Historical Office.
The House passed its own measure in November. The White House and Congress have now come further toward the goal of a comprehensive overhaul of the nation's health care system than any of their predecessors.
The legislation would ban the insurance industry from denying benefits or charging higher premiums on the basis of pre-existing medical conditions. The Congressional Budget Office predicts the bill will reduce deficits by $130 billion over the next 10 years, an estimate that assumes lawmakers carry through on hundreds of billions of dollars in planned cuts to insurance companies and doctors, hospitals and others who treat Medicare patients.
For the first time, the government would require nearly every American to carry insurance, and subsidies would be provided to help low-income people to do so. Employers would be induced to cover their employees through a combination of tax credits and penalties. The legislation costs nearly $1 trillion over 10 years and is paid for by a combination of taxes, fees and cuts to Medicare.
Republicans were withering in their criticism of what they deemed a budget-busting government takeover. If the measure were worthwhile, contended Minority Leader Mitch McConnell, R-Ky., "they wouldn't be rushing it through Congress on Christmas Eve."
House Minority Leader John Boehner assailed the bill moments after passage.
"Not even Ebenezer Scrooge himself could devise a scheme as cruel and greedy as Democrats' government takeover of health care," the Ohio Republican said in a statement.
"Senator Reid's health care bill increases premiums for families and small businesses, raises taxes during a recession, cuts seniors' Medicare benefits, adds to our skyrocketing debt, and puts bureaucrats in charge of decisions that should be made by patients and doctors," he said. "The bill also authorizes taxpayer-funded abortions, violating long-standing federal policy. It's no coincidence that the more the American people learn about this monstrosity, the more they oppose it.
The occasion was moving for many who'd followed Kennedy, who died in August.
"He's having a merry Christmas in Heaven," Sen. Paul Kirk, D-Mass., appointed to fill Kennedy's seat, told reporters after the tally.
Kirk said he was "humbled to be here with the honor of casting essentially his vote."
Said Dingell: "This is for me, this is for my dad, this is for the country."
Reid nailed the last votes down in a rush of dealmaking in the last week that is now coming under attack because of special provisions obtained by a number of senators. In Nebraska, home to conservative Democrat Ben Nelson, the Democrats' crucial 60th vote, the federal government will pay 100 percent of the cost of a planned Medicaid expansion in perpetuity, the only state getting that deal.
Negotiations between the House and Senate to reconcile differences between the two bills are expected to begin as soon as next week. The House bill has stricter limits on abortion than the Senate, and unlike the House, the Senate measure omits a government-run insurance option, which liberals favored to apply pressure on private insurers but Democratic moderates opposed as an unwarranted federal intrusion. Obama has signaled he will sign a bill even if it lacks that provision.