TIME's Exclusive Interview with President Obama

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Brooks Kraft / Corbis for TIME

President Barack Obama

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And would a co-op fit that definition?
Well, I think in theory you can imagine a co-operative meeting that definition. Obviously sort of the legal structure of it is less important than practically how can it operate. There are concerns that in the past, attempts at setting up co-ops have not been successful because they just haven't been able to get off the ground; sort of the start-up energy involved may not exist if you're doing a state-by-state co-op effort as opposed to a broad national plan.

But to go to your earlier question, I guess — and I also said at the beginning that it was very important for us to alter delivery systems so that we could reduce costs. And as the process has moved forward, we have further refined those aspects of the system that can be changed to deliver more bang for the buck.

Now, if you look at the results, the 80% of all the various bills that are out there that people have agreed to, reflect our — most of our ideas from the start of this process. So we haven't had trouble in moving the process to most of the things that we want to see in health care, which we think will help the American people have quality, affordable health care.

But the 20% that right now is still the holdup would have been a holdup if we had put forward a plan, hadn't put forward a plan, had left it to Congress, had written it ourselves — because it represents some longstanding ideological divisions in our Congress and, frankly, in our society.

So, let's just take one example, and that is how do you pay for the uninsured who would be receiving some help, some subsidies, through this plan? Very early we identified over $500 billion from Medicare and Medicaid savings, such as the elimination of all the subsidies for Medicare Advantage, that would cover up to two-thirds of the cost of covering the uninsured.

We knew we were going to have a third left. We've put forward what I continue to believe is the most sensible way of financing that final one-third, and that is simply to lower the deductions, the itemized deductions that wealthy individuals can take. That would have covered it.

Now, we put that forward very early. The fact that that has not yet been adopted I don't think is reflective of me not giving clarity to Congress. It has to do with the fact that members of Congress are skittish about anything involving taxes, even though these are taxes that would not be imposed on anybody making less than $250,000 a year. It's just tough politics. Those are things that people are vulnerable to be attacked on.

The second area where we still haven't arrived at agreement had to do with the public option, and we've already started to discuss that. There is just a — not only an ideological suspicion of the public option on the part of many Republicans, but many of them also saw it as an opportunity to try to resurrect the old scare tactic of government-run health care, socialized medicine, eliminating your ability to choose your own doctor. That was going to exist regardless of whatever tactics we employed.

And then the final part of this, which we knew was always going to be contentious — and I actually think that the way this process has evolved, I like where we are right now but it's still tough — has to do with the issue of how do you bend the cost curve, because you can't say we're going to control cost inflation except nothing changes; something has to change if health care inflation is going to be reduced.

And that was always going to be a wrestling match because even if these are benign changes — changes in how the delivery system works, reimbursing doctors for quality as opposed to quantity, trying to reduce the number of tests, trying to discourage hospitals from readmitting patients, or at least providing them bonuses for getting it right the first time — all those things mean that people are going to have to change their practices.

And when you have a system this large, with this many players involved, it was inevitable that not only would that be contentious but that, again, the public would be suspicious of the possibilities that, well, somehow this means that my doctor is not going to be able to give me what he or she thinks I need.

But isn't that going to happen occasionally or at least that I'm not going to be able to get what I want? I mean —
Well — yes. I mean, here's what I've tried to say. Here's how I've described it, and this is the truth as I see it: There is nothing that — there is nothing that would make you healthier that health reform would prevent you from getting. What we are interested in doing is giving doctors and patients the ability to sort through what's effective and what's not, and not purchase things that don't make any improvements in your health.

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