WASHINGTON — President Barack Obama on Wednesday rejected the idea of fully taxing Americans' employer-provided health insurance benefits, but suggested he might be persuaded to tax so-called Cadillac coverage, benefits worth perhaps more than $13,000 a year, in the interest of a compromise with Congress.

"I continue to believe that's the wrong way to do it," the president said in an ABC News special taped Wednesday in the East Room of the White House. The town hall-style event included an audience of 164 invited guests and was aired exclusively on ABC.

Obama said he would prefer to pay for expanded coverage by eliminating some deductions for higher-earning taxpayers but that "there's going to have to be some compromise."

The special, which drew the ire of Republicans because it didn't include them, came as Obama intensifies his campaign to overhaul the nation's health-care system. Polls show Americans want but fear change, and a divided Congress is grappling over what to do.

In one exchange with the audience, neurologist Orrin Devinsky asked the president to imagine a scenario in which his wife or one of their daughters became seriously ill. If the sort of public insurance option Obama proposes as an alternative to private insurance limited their tests or treatment, would the president forgo outside options or look for help beyond what was available to Americans with no other option?

Obama didn't answer directly, but said that with his family, "I always want them to get the very best care." At the same time, he said, "The status quo is untenable."

Obama said he understands Americans' trepidation about changing the system: "They know that they're living with the devil, but the devil they know they think may be better than the devil they don't." He said any reform would be phased in, not happen overnight.

Appearing earlier Wednesday on ABC's "Good Morning America," Obama said he "absolutely" expects Congress to pass comprehensive health-care legislation by year's end.

Obama also met at the White House on Wednesday with five governors who are part of a bipartisan group that recently hosted health-care roundtables around the country.

"There's no perfect unanimity across the table in terms of every single aspect of reform," the president said in remarks after their meeting. "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."

The scope of what Obama, many Democrats and some Republicans want to do is massive, and lawmakers have various ideas about how to get it done.