"That proposal is a political compromise, not a policy compromise," Dean said. "No one knows what it would look like and when it has been tried in the past it mostly hasn't worked."
Dean, a strong advocate for the public insurance option, said people need the choice of a government-run plan to compete with private insurers.
He argued that because private insurance companies are investor-owned, they are spending less money on health services and more on equity.
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Medicare, Dean said, "is by nature much more efficient" because currently seniors can move, leave their job and get sick without having their coverage discontinued.
"Everybody over 65 has it and the question is 'Why don't we open up that program,'" he said.
Schieffer asked who foots the bill for a government-run health care option.
Dean said that taxpayers receive subsidies if they need help paying for the option and that large employers would "either share the cost or keep the system the way it is."
"Small employers are off the hook," he said, arguing that they no longer need to provide health insurance to their employees.
Dean said "we are getting pretty mixed signals from Senator Grassley. … I think the Republicans owe it to this country to give us a clearer sense of what they will and will not support."
Senators Charles Grassley, R-Iowa, and Kent Conrad, D-North Dakota, appeared earlier on "Face the Nation," saying that the . The co-op solution, they said, would be the only hope for a bipartisan agreement.
Dean also said the $600 billion dollar House price tag on health care is "reasonable" because it is less than we are spending in Iraq and Afghanistan.