U.S. President Barack Obama says he "absolutely" believes legislation overhauling the nation's health care system will be passed this year.

In a nationally televised interview Wednesday morning on ABC's Good Morning America, the president said a final bill will pass because "the American people understand it has to get done."  The president warned that if the health insurance system is not reformed, it would lead to higher costs for families and businesses, as well as bankruptcy for Medicare and Medicaid, the federal health programs for elderly and poor Americans. 

Government-sponsored insurance

Mr. Obama, along with many Democratic senators, favors a government-sponsored insurance plan that will compete with private insurers so uninsured Americans will be able to afford health insurance.  Senate Republicans, as well as some Democrats, believe the option will run private insurers out of business.

But the president dismissed these concerns during a White House press conference Tuesday. 

He said if private insurers are giving consumers the best possible deal, then it would not be logical to suggest the public plan will represent an unfair competition.

Town hall meeting

Mr. Obama is stepping up efforts to build public support for his health care initiatives.  He will participate in a town hall-style meeting Wednesday night from the White House. 

The president also said in his Wednesday morning interview that his plan would not prevent employers from switching to a public health insurance plan in an effort to keep costs down.

Despite intense opposition by Senate Republicans, the Obama administration is pushing for a bipartisan deal on the legislation.  White House Chief of Staff Rahm Emanuel met with a group of senators on Capitol Hill late Tuesday and urged them to continue working for a compromise.

The group is working on an alternative that would fund non-profit health cooperatives that would bridge the gap between a government-sponsored option and private insurance. 

$1 trillion cost

The health care reform effort hit a snag in the Senate last week, after the Congressional Budget Office said a plan being considered by the Senate Health Committee would cost about $1 trillion over the next 10 years.  A plan under debate in the Senate Finance Committee could cost $1.6 trillion.  Officials on the Finance Committee say they have cut more than $400 billion from their version of the plan.

House Democratic leaders have also unveiled a proposal that includes a government-run health insurance plan.