By Michael A. Fletcher
Washington Post Staff Writer
Thursday, June 25, 2009

A bipartisan group of governors told President Obama yesterday that they share his urgent desire to restructure the nation's health-care system but warned that any changes should not place more burdens on strained state budgets or eliminate innovative programs they already have in place.

With many state budgets burdened by ballooning Medicare and Medicaid costs, the five governors who met with Obama at the White House agreed that changes are needed to expand health-care coverage and contain its costs. But some of the governors voiced concern about how to achieve reform.

"There's no perfect unanimity across the table in terms of every single aspect of reform. I think everybody here wants to make sure that governors have flexibility, that they have input into how legislation is being shaped on the Hill," Obama said.

The governors were adamant that the restructuring of the health-care system not push new costs on states. "If we're going to add more population onto the Medicaid rolls, there has to be a way to pay for that," said Gov. Jennifer M. Granholm (D-Mich.), adding that it is a position Obama supported.

Last night, the president fielded questions at a town hall meeting broadcast by ABC News from the East Room of the White House. The president used the event to continue his effort to drum up public support for his health-care proposals. He said he is open to a range of ideas for funding the expansion of care to cover 46 million uninsured Americans, saying he did not want "to prejudge" the work being done in Congress.

Early in the program, the president was confronted with a personal question about his plan.

Orrin Devinsky, a neurologist, asked the president whether, if he had a family member who was ill, he would accept restrictions in access to specialists that some think would be part of any plan to drive down future health-care cost increases.

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," Obama said.

Earlier at the White House, the president met with Republican governors Jim Douglas of Vermont and Mike Rounds of South Dakota, and with Democrats Granholm, Jim Doyle of Wisconsin and Chris Gregoire of Washington. All five had hosted regional health-care forums this year in which they heard concerns about the current system.

White House officials said Obama opened the meeting with his pitch for reform, calling the status quo unsustainable because of runaway costs that threaten the budgets of families, businesses, and state and federal governments. He also repeated his pledge to restructure health care without adding to the federal budget deficit, while creating new incentives to control costs.

As the governors met with Obama, talks over a health-care measure continued on Capitol Hill, where Senate Finance Committee Chairman Max Baucus (D-Mont.) said he was making progress toward a plan that could win bipartisan support.

With cost estimates for health reform soaring beyond $1 trillion over the next decade, Democrats are struggling to come up with a funding proposal. In the Senate, lawmakers are talking about trimming billions of dollars from Medicare and Medicaid spending, taxing the health benefits millions of people get through their employers and imposing a "free-rider" penalty of as much as $300 billion over the next 10 years on companies that fail to provide quality, affordable health insurance to their workers, said Sen. Kent Conrad (D-N.D.).

But they are scrambling to find another $200 billion in savings or new revenue to cover the full cost of a plan estimated at $1.2 trillion.

House Democrats, meanwhile, are headed in a different direction. While their plan also includes about $500 billion in Medicare and Medicaid cuts, many Democrats in the House oppose taxing health benefits, a proposal that has the potential to break Obama's pledge not to impose new taxes on families who earn less than $250,000 a year.

Instead, they are looking at a 2 percent surtax on the nation's wealthiest families, in addition to an array of other options.

Staff writer Lori Montgomery contributed to this report.