"And am I exasperated? Absolutely, I'm exasperated, because this is entirely unnecessary," said Obama in an interview with CNBC.
"I am exasperated with the idea that unless I say to 20 million people, 'You can't have health insurance,' these folks will not reopen the government. That is irresponsible," he said.
The only thing stopping Republican House Speaker John Boehner from holding a vote on legislation to end the impasse is that the GOP leader "has not been willing to say no to a faction of the Republican Party that are willing to burn the house down because of an obsession over my health care initiative," Obama said.
He emphasised that he is ready to negotiate and to talk about how the Affordable Care Act (ACA) can function better, but he is not going to do so under the "threat" of keeping the government closed down.
The US federal administration has been partially paralyzed since midnight on Monday because of the lack of agreement in Congress over approving funds for the new fiscal year.
Obama: The Wall Street should be concerned about the shutdown
The more conservative wing of the Republicans is seeking to make that financing conditional on delaying the implementation of the ACA, Obama's signature domestic policy initiative.
When asked about the relative calm with which Wall Street has been reacting to the fiscal crisis, the president warned the business community against being complacent.
"This time I think Wall Street should be concerned," Obama said. "When you have a situation in which a faction is willing to default on US obligations, then we are in trouble."