EXCLUSIVE: President Obama Defends Right to Choose Best Care

PHOTO: Charles Gibson President ObamaIda Astute/ABC News
ABC's Charles Gibson speaks with President Obama during a Health Care Town Hall style forum.

President Obama struggled to explain today whether his health care reform proposals would force normal Americans to make sacrifices that wealthier, more powerful people -- like the president himself -- wouldn't face.

The probing questions came from two skeptical neurologists during ABC News' special on health care reform, "Questions for the President: Prescription for America," anchored from the White House by Diane Sawyer and Charles Gibson.

VIDEO: Obamas Prescription for AmericaPlay

Dr. Orrin Devinsky, a neurologist and researcher at the New York University Langone Medical Center, said that elites often propose health care solutions that limit options for the general public, secure in the knowledge that if they or their loves ones get sick, they will be able to afford the best care available, even if it's not provided by insurance.

Devinsky asked the president pointedly if he would be willing to promise that he wouldn't seek such extraordinary help for his wife or daughters if they became sick and the public plan he's proposing

VIDEO: Obamas Prescription for AmericaPlay

limited the tests or treatment they can get.

The president refused to make such a pledge, though he allowed that if "it's my family member, if it's my wife, if it's my children, if it's my grandmother, I always want them to get the very best care.

"There's a whole bunch of care that's being provided that every study, that every bit of evidence that we have indicates may not be making us healthier," he said.

Gibson interjected that often patients don't know what will work until they get every test they can.

"Oftentimes we know what makes sense and what doesn't," the president responded, making a push for evidence-based medicine.

VIDEO: Obamas Prescription for AmericaPlay

Gibson asked the president if it doesn't make sense to decide what the limitations will be on options in any health care reform proposal before voting on it.

"That's what people are afraid of," Gibson said.

The president said he understood the American people "know they're living with the devil, but the devil they know instead of the devil they don't."

Obama: GOP Senators Are Wrong on Public Option

ABC News video of Obama explaining why government should get involved in health care.Play

On the "Nightline" edition of the health care forum, Gibson read the president a letter from Republicans on the Senate Finance Committee expressing concern about the creation of a government-run health care plan.

"At a time when major government programs like Medicare and Medicaid are already on a path to fiscal insolvency, creating a brand new government program will not only worsen our long-term financial outlook but also negatively impact American families who enjoy the private coverage of their choice," the senators wrote.

"The end result would be a federal government takeover of our health care system, taking decisions out of the hands of doctors and patients and placing them in the hands of a Washington bureaucracy."

Video of ABCs Prescription for America program at the White House.Play

"They're wrong," the president said, arguing that in a Health Insurance Exchange, the public plan would be "one option among multiple options."

The concern, Gibson articulated, is that such a plan wouldn't be offered on a level playing field.

The president rebuffed that, arguing that "we can set up a public option where they're collecting premiums just like any private insurer and doctors can collect rates," but because the public plan will have lower administrative costs "we can keep them [private insurance companies] honest."

Obama said he didn't understand those advocates of the free market who constantly say the private sector can do things better and are yet worried about this plan.

"If that's the case, no one will choose the public option," the president said. He also suggested, however, that the private sector might not necessarily be better, point out that users of Medicare and Veterans Administration hospitals constantly rate "pretty high satisfaction."

Views on Government-Funded Health Insurance

According to the latest ABC News/Washington Post poll, 62 percent of Americans support creating a government-funded entity to offer health insurance to those who don't get it elsewhere. But if that caused many private insurers to go out of business because they couldn't compete, support plummets to 37 percent.

The White House has shown some flexibility about a government-run plan. In a meeting with a bipartisan group of governors today, the possibility was raised of states offering public plans of their own instead of just one federally administered plan, according to a source with knowledge of the meeting. And White House chief of staff Rahm Emanuel told Democratic senators Tuesday night that the president was open to "alternatives" to the public plan.

Sawyer asked Ron Williams, the CEO of Aetna Insurance, "Is the president right that you need to be kept honest?"

Williams said he disagreed with the notion of a public plan.

"It's difficult to compete against a player who's also the person refereeing the game," Williams said. He proposed working to "solve the problem as opposed to introduce a new competitor who has rule-making ability."

Gibson pointed out that the president constantly makes the argument that if you like your insurance you won't have to change it. And yet from the audience, John Sheils, senior vice president of The Lewin Group, a health care policy research and management consulting firm, estimated that up to 70 percent of those with private insurance would end up on the public plan.

"There are a whole series of ways that we could design this," the president said, arguing that employers would be given a "disincentive" to shift their employees to the public plan.

Another neurologist, Dr. John Corboy of the University of Colorado Health Science Center, asked the president, "What can you do to convince the American public that there actually are limits to what we can pay for with our American health care system and if there are going to be limits, who's going to design the system and who's going to enforce the rules for a system like that?"

Obama, however, didn't directly answer the question.

"If we are smart, we should be able to design a system in which people still have choices of doctors and choices of plans that make sure that necessary treatment is provided but we don't have a huge amount of waste in the system," he said.

He said he had "great confidence" that physicians "are going to always want to do right thing" if they have the right information and a payment structure that focuses on evidence and results and not tests and referrals.

"We should change those incentive structures," the president said. "Our job this summer and this fall," he said, is to "identify the best ways to achieve the best possible care."

The president cited the Mayo Clinic as an example of a medical center where experts had figured out the most effective treatments and eliminated waste and unnecessary procedures.

Sawyer said that e-mails ABC News had received argued that "the Mayo Clinic is exactly the point," indicating that private companies are solving this problem, and raising the question as to why the government needs to get involved.

"And, unfortunately, government, whether you like it or not, is going to already be involved," Obama said, citing Medicare and Medicaid.

One questioner -- Marisa Milton, vice president of health care policy for the HR Policy Association, a public policy advocate for human resource executives -- said that "other industrialized nations provide coverage for all their residents" with "high quality care" without spending more money.

"A lot of those countries employ a different system than we do," the president said. "Almost all of them have what would be considered a single-payer system in which the government operates what is essentially a Medicare for all."

The president said he didn't think it wise to attempt to "completely change our system root and branch" since health care is one-sixth of the U.S. economy. It "would be hugely disruptive," he said, arguing that citizens would be forced to change their doctors and insurance plans "in a way I'm not prepared to go."

End-of-life issues were raised as well; right now it is estimated that nearly 30 percent of Medicare's annual $327 billion budget is spent on patients in their final year of life.

Jane Sturm told the story of her nearly 100-year-old mother, who was originally denied a pacemaker because of her age. She eventually got one, but only after seeking out another doctor.

"Outside the medical criteria," Sturm asked, "is there a consideration that can be given for a certain spirit ... and quality of life?"

"I don't think that we can make judgments based on peoples' spirit," Obama said. "That would be a pretty subjective decision to be making. I think we have to have rules that say that we are going to provide good, quality care for all people.

"We're not going to solve every single one of these very difficult decisions at end of life," he said. "Ultimately that's going to be between physicians and patients."

Who Will Pay for All of This?

"How and who will pay for national health care system," asked Christopher Bean, who said he has good insurance with his job at Allint Tech Systems and worries about government interference.

"We will have some up-front costs," the president acknowledged. "And the estimates ... have been anywhere from a trillion to $2 trillion. But what I have said is whatever it is we do, we pay for."

The president criticized the Congressional Budget Office, which recently analyzed the cost of two Democratic Senate draft bills as costing between $1 and $1.6 trillion.

The president said the CBO "doesn't count all of the savings that may come from prevention, may come from eliminating all of the paperwork and bureaucracy because we have put forward health IT. It doesn't come from the evidence-based care and changes in reimbursement ... they're not willing to credit us with those savings. They say, 'That may be nice, that may save a lot of money, but we can't be certain.'

"We spend $177 billion over 10 years in providing subsidies for insurers," the president said as an example of the latter.

About a third of the costs will come from new revenue," the president said, pushing his proposal to raise taxes on those making more than $200,000 a year through a change in the itemized deduction in the tax code.

Gail Wilensky, a senior fellow at Project HOPE who ran Medicare during the administration of President George H.W. Bush, pushed the president for more specifics on how he expects to pay for the plan.

"This is not an easy problem," the president acknowledged. "And it's especially not an easy problem when the economy is going through a difficult phase."

But the president suggested the stars were aligning for reform, citing efforts being made such as the pharmaceutical industry's recent pledge to help defray the costs of prescription drugs for seniors, and argued that now was the time for reform.

"We have to have the courage and the willingness to cooperate and compromise in order to make this happen," the president said. "And if we do, it's not going to be a completely smooth ride, there's going to be times over the next several months where we think health care is dead, it's not going to happen but if we keep our eye on the prize ... then I'm absolutely convinced that we can get it done this time."

Earlier in the day at the White House, Obama told a bipartisan group of governors he wants them to be kept in the loop as health care reform legislation develops on Capitol Hill.

"We're committed to working with them in the weeks and months to come to make sure that when we get health reform done it is in partnership with the states, where the rubber so often hits the road," the president told reporters.

But Obama acknowledged the thorny issues they're all facing -- including whether there should be a government-run public plan, who will pay for it, and how to achieve universal coverage.

"There's no perfect unanimity across the table in terms of every single aspect of reform," the president said.

The biggest bone of contention may be how to pay for reform.

"Anything that we do on health care we have to have a long-term plan to pay the bills," said South Dakota Gov. Mike Rounds, a Republican, who attended the meeting.

In an exclusive interview with ABC News' Diane Sawyer that aired today on "Good Morning America," Obama indicated that there was a breaking point in the balance sheets where he would say that the cost of reforming the system is too great for the federal government to handle, but he did not put a price tag on it.

"I think that if any reform that we get is not driving down costs in a serious way ... if people say, 'We're just going to add more people onto a hugely inefficient system,' then I will say no. Because -- we can't afford it," he said.

Taxing Health Care Benefits?

One option being considered on Capitol Hill is taxing health care benefits, which are currently tax exempt.

Today, a key Democratic senator indicated that may be inevitable.

"It is hard for me to see how you have a package that is paid for that doesn't include reducing the tax subsidy for health care," said Sen. Kent Conrad of North Dakota, chairman of the Senate Budget Committee, who is regarded among Democrats as something of a deficit hawk.

Conrad sees the potential for a significant source of revenue.

"Tax subsidies for health care. They're huge. Hundreds of billions of dollars a year," he said.

Obama said he opposes that approach, instead wanting to pay for the bill partly by reducing the tax deductions wealthier people can take when donating to charity.

"We would raise enough money to actually make sure this thing is paid for," Obama said in the ABC interview. "Now members of Congress may have other ideas about how best to do this. I'm happy to listen to them."

Conrad said that limiting deductions is "still on the table" in the committee's discussions.

While the details are hammered out on Capitol Hill, there is a legislative push and pull and shifting positions at both ends of Pennsylvania Avenue.

As a candidate, then-Sen. Obama bashed his rival for the Democratic nomination, Hillary Clinton, for proposing that Americans be mandated to have health insurance.

"She'd have the government force you to buy health insurance," he said Feb. 23, 2008. "I disagree with that approach. I believe that the reason Americans don't have health care isn't because no one's forced them to buy it, it's because no one's made it affordable."

But now the president is acknowledging that his thinking on the issue has "evolved" and he could support a law mandating that individuals purchase health care coverage, with fines for those who do not.

Obama stressed that there must be some kind of waiver for those who are simply unable to afford it.

"People have made some pretty compelling arguments to me that if we want to have a system that drives down costs for everybody, then we've got to have healthier people not opt out of the system," the president told ABC News.

Earlier this month in a letter to congressional leaders working on the reform legislation, Obama said he would consider supporting such a measure, if it has room for exemptions for small businesses and individuals who cannot afford the premiums.

Obama's Approval Ratings on Health Care Slip

With the health care debate ramping up, with Republicans assailing Democrats for the high price tag and a public option plan, Obama's ratings on the subject slipped slightly in the latest ABC News/Washington Post poll.

Only 53 percent of Americans approve of Obama's handling of health care while 39 percent disapprove of it, up from 29 percent who disapproved in April, according to the poll.

Concluding the health care forum, Obama expressed optimism that reform is possible.

"If the American people get behind this, this is going to happen," the president said.

ABC News' Z. Byron Wolf contributed to this report.