Ryan, like other Republicans, argued that the public option plan is a "non starter" and will become a "government monopoly."
"The public plan option is a stacked deck," Ryan said on "GMA." "It's absolutely the government being a referee and player in the same game."
The White House has shown some flexibility about a government-run plan. In a meeting with a bipartisan group of governors Wednesday, 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.