The Congressional Budget Office's first cost estimate on an early health-care reform bill didn't exactly roll out the red carpet for President Obama's efforts in that arena.

The initial estimate -- for parts of a comprehensive reform plan drafted by Senator Edward Kennedy (D-Mass.) -- would spend $1 trillion over 10 years but end up reducing the number of uninsured people in the U.S. by around than a third, providing just 16 million more people with health insurance.

• Scroll down to read the CBO's full report

Still, the analysis, released Monday evening, gives the White House and Congress a starting point for debating how to pay for reform and how far to extend it. The Administration acknowledges reform will cost about $1 trillion, but it is counting on that amount to cover more people -- as many as all of the 46 million people currently without health coverage.

A senior Administration official, in response to the CBO's analysis, said he felt the White House's Democratic allies could draft a less expensive bill.

"We can do better," he said of the estimates.

White House Budget Director Peter Orszag told FOX: “There are a lot of bills out there.”

The CBO said its estimates were informal and incomplete, and will be revised. For instance, it doesn't take a broader look at interactions between different pieces; how some parts of the program might undercut cost savings in other parts -- or help others parts reduce costs even further.

In addition, its analysis did not include the President's proposal to pay for health-care reform in part by cutting government Medicare and Medicaid spending by more than $600 billion over the decade. But the CBO estimates did include $257 billion in tax increases, nearly the amount -- $326 billion -- proposed by the President over the decade.

See our Health Care Costs page for the latest videos and news on the topic.

The CBO analysis came on the day the President traveled to Chicago for the annual meeting of the American Medical Association, to win wary doctors over to reform.

Sen. Kennedy is a key player in the process as the chairman of the Senate Health, Education, Labor and Pension Committee. His bill is ambitious, proposing to require businesses and individuals to purchase medical coverage, purchasing it mainly through shopping pools called health care “gateways”; to bar insurance companies from refusing to cover anyone because of preexisting conditions, and to provide generous federal subsidies to families purchasing coverage.

"As the CBO letter indicates, this is an incomplete statement of an incomplete bill,” a committee spokesman said. “We look forward to a complete CBO estimate of a complete bill."

In the Kennedy plan, nearly all of the costs of providing health insurance to 16 million more people would stem from the subsidies, estimated at $1.3 trillion over 10 years, CBO said.

The coverage of an additional 16 million people in the Kennedy plan is a net number. The CBO estimates 39 million people would join a federally-sponsored “gateway” health care plan by 2019, but that 15 million of them would join by leaving their employer-sponsored health plans for the federal program and another 8 million would join by quitting Medicaid and other state-sponsored health insurance plans -- in essence, 23 million people already covered would simply swap one form of coverage for the government’s “gateway” coverage.

In its preliminary analysis, CBO estimates that the number of uninsured would climb to nearly 54 million by 2019. But with 16 million additional people getting coverage in the Kennedy plan, about 37 million would remain uninsured, the CBO said. (Numbers do not add up due to unspecified CBO rounding.)

Democratic senators who support the Kennedy draft have scheduled a press conference for Tuesday to discuss the CBO analysis. Kennedy’s committee will start formally writing his plan -- “marking it up” -- on Wednesday.

CBO's Preliminary Analysis on Sen. Kennedy's Health-Care Plan