By Matt Spetalnick

MINNEAPOLIS (Reuters) - President Barack Obama warned Americans on Saturday not to be tricked by "scare tactics" he accused his opponents of using as he went on the road to rally support for his drive to overhaul the U.S. healthcare system.

Taking his healthcare pitch to a campaign-style rally in Minnesota three days after addressing a joint session of Congress, Obama hoped to keep up the pressure on wary fellow Democrats as well as Republicans to move forward on his top domestic priority.

"The time for games has passed. Now is the time for action. Now is the time to deliver on healthcare," Obama told a cheering crowd of more than 10,000 people at the Target Center sports arena in Minneapolis.

While Obama pressed his case on friendly political turf, tens of thousands of conservative opponents marched in the U.S. capital against his health care initiative, arguing it amounted to a government takeover which would drive the country toward socialism.

Outside the Minneapolis arena, some 200 hundred supporters and detractors squared off. "Why are we changing what is going on for 6 percent of the population? Way too hastily and not enough input," said Laura Oberg of St. Louis Park, Minnesota.

Obama's trip to the Midwest was part of his effort to seize back the initiative on the divisive issue after losing ground to critics during a tumultuous summer.

Even some supporters had criticized him for doing too little to sell his plan to a skeptical public while his approval ratings slipped. Obama is now throwing his full political weight behind the push to reshape the $2.5 trillion healthcare industry, with more outings planned next week.

SETTING THE TONE

His success or failure could set the tone for the rest of his presidency.

Speaking in Minneapolis, Obama insisted he was open to "different ideas" from across the ideological spectrum, but he pushed back hard against his opponents. "We've heard scare tactics instead of honest debate," he said.

He urged Americans not to pay attention to "scary stories" about how Medicare benefits will be cut under his healthcare reform effort. "That will never happen on my watch," he said.

Obama used his weekly radio and Internet address on Saturday to make his case to Americans who already have health insurance, warning them their coverage would be at risk unless the healthcare sector was fixed.

Many Americans are wary of the need for reform because they have health insurance through their employers, and Obama has said repeatedly that his program would not force them to change their insurance or doctors.

But polls have shown they do not believe they would benefit from a government program to ensure that all citizens have affordable insurance coverage, and worry that it would boost the burgeoning U.S. budget deficit and raise their taxes.

Republican Senator John Cornyn said in his party's weekly address that Obama's plan cost too much.

"When you start counting in 2013, the first full year of implementation, the cost of the House bill comes to about $2.4 trillion over 10 years, according to the Senate Budget Committee," Cornyn said.

The insurance industry has also fiercely opposed plans for a government-run program to compete with private insurers -- the "public option" -- which Obama has floated as a preferred part of his plan and reinforced that on Saturday.

"I am not going to back down from the basic principle that if Americans can't find affordable coverage, we're going to provide you a choice," he said, arguing it would be like public colleges and universities competing with private institutions.

Obama must not only try to win Republican support, but also secure the backing of some conservatives within his own Democratic party needed to get the package passed in the Democratic-controlled Congress.

Obama says his plan would expand coverage to 30 million Americans who are now uninsured, but would not cover illegal immigrants -- as some Republicans have repeatedly claimed.

He estimates reform would cost $900 billion over 10 years without increasing the budget deficit. But critics insist he has not provided enough specifics on how it would be financed.

(Additional reporting by Patricia Zengerle and Jeremy Pelofsky in Washington and Todd Melby in Minneapolis; editing by Jackie Frank and Mohammad Zargham)