Did President Obama Make His Case on Health Care?

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.

On Wednesday, 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.

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