Government moving into central role in health care

WASHINGTON — Government is poised to become king of the hill in America's vast health care system, with or without President Barack Obama's planned redo, according an economic report released Thursday.

Federal and state programs will pay slightly more than half the tab for health care purchased in the United States by 2012, says the analysis by Medicare number crunchers published in the journal Health Affairs.

That's even if Obama's health care overhaul wastes away in congressional limbo. Long in coming, the shift to a health care sector dominated by government is being speeded up by the deep economic recession and the aging of the Baby Boomers, millions of whom will soon start signing up for Medicare.

"This does mark a pretty stark jump in the data," said Christopher Truffer of Medicare's Office of the Actuary, which prepared the analysis.

For all the hue and cry over a government takeover of health care, it's happening anyway.

The tipping point is likely to come next year, Truffer said. For technical reasons, the report assumes that Congress is going to allow Medicare to cut doctor fees by 20 percent later this year, as required by a 1990s budget law. But lawmakers have routinely waived such cuts, and they're not likely to allow them in an election year. So government probably will end up picking up most of the nation's medical costs in 2011, instead of 2012.

The report serves as a reality check in the debate over Obama's health care plan, which has been marked by disagreements between the political parties over how large a role government should play.

Congressional Democrats want to move forward with the sweeping legislation, but are stalled over disagreements among themselves. Republicans have rejected Obama's approach as a top-down, big government solution.

Richard Foster, Medicare's top economic forecaster, said the recession has only worsened the two stubborn problems facing the U.S. health care system, lack of insurance coverage and high costs. "All that argues that some form of health care reform is a good idea," Foster said.

The Democrats' plan would expand coverage to more than 30 million people now uninsured, while taking some modest steps to slow the pace of future cost increases. It would set up a new insurance marketplace for small businesses and people buying coverage on their own, with government subsidies available for many. Denial of coverage because of health problems would be prohibited.