The vote was 54 to 45.
Democratic Sen. Ben Nelson of Nebraska and Republican Sen. Orrin Hatch of Utah wanted to ban any insurance plan that gets taxpayer dollars from offering abortion coverage. The stronger restrictions mirrored provisions in the House-passed health care bill.
The Senate bill currently allows insurance plans to cover abortions but tries to separate private funds from federal money. It specifies that abortion coverage can only be paid for with private dollars.
"As our bill currently reads, no insurance plan in the new marketplace, whether private or public, would be allowed to use public funds for abortion," said Senate Majority Leader Harry Reid, D-Nev.
However, the abortion issue isn't finished in the Senate, reports CBS News Radio Correspondent Bob Fuss. Democrats will need to appease Nelson, who has said he will join a Republican filibuster of the whole bill if his concerns over abortion are not met.
After the vote, Nelson would not say whether he would filibuster over the abortion language.
"it makes it harder to be supportive, we'll see what happens," he said. "It's not my intent to go looking to achieve a compromise."
Seven Democrats supported the stiffer restrictions, while two Republicans Maine Sens. Susan Collins and Olympia Snowe voted with the Democrats. In the House, anti-abortion Democrats have threatened to vote against any final bill that dilutes the restrictions already approved in their bill.
Abortion opponents say the restrictions simply extend current federal laws that prohibit taxpayer funding of abortion except in cases of rape, incest or to save the life of the mother. But abortion rights supporters said the restrictions would have the effect of denying women coverage for a legal medical procedure already covered by many insurance plans, even if they use their own money.
Poll Analysis: Opinions About Abortion Remain Remarkably Steady
"This amendment would place an unprecedented restriction on a woman's right to use her own money to purchase insurance coverage that includes abortion," said Sen. Dianne Feinstein, D-Calif.
But Nelson called the separation of funds in the bill an accounting gimmick. "The reality is federal funds would help buy coverage that includes abortion," he said.
The vote came as Senate Democrats remained at odds on the issue of creating a new government insurance plan with time running out to pass Obama's health care remake by Christmas.