ANALYSIS: Government takeover of health care a reality

CHAPEL HILL, N.C. ---- In the long, loud argument about President Barack Obama's health care overhaul, opponents contend it would point toward a government takeover of the system. Democrats deny that. Now there's evidence that it's already happening, inexorably, whatever the outcome on the stalled health care bill.
For the first time, government programs will account for more than half of U.S. health care spending by 2012, and that share will keep creeping upward, according to federal actuaries.

Federal and state government programs now cover an estimated 42 percent of health care costs. The number jumps significantly in the first part of the decade, exceeding 50 percent by 2012, and then rises slowly toward the end of the decade, when it's likely to reach 52 percent.

So after all the months of wrangling about the public option for health care coverage, it turns out not to be optional in the current system.

"I don't know if anybody noticed that, for the first time this year, you saw more people getting health care from government than you did from the private sector; not because of anything we did, but because more and more people are losing their health care from their employers. It's becoming unaffordable," Obama told reporters Tuesday ---- with a bit of hyperbole.

The numbers make a compelling case for change and Obama is making another push for it. He's called Republican and Democratic leaders to discuss health care with him on Feb. 25, all on television. It amounts to a compromise offer built into a challenge to the Republicans, who held the party line against his health care bill with unanimous opposition in the Senate and only one GOP vote in the House.

Obama said he wants to "look at the Republican ideas that are out there." But he is not offering to do what GOP leaders demand, as they have all along ---- scrap the current bill and start from scratch. The White House said he wants "comprehensive reform similar to the bills passed by the House and the Senate."

That was at hand before the Democrats lost their filibuster-blocking 60th Senate vote in a special election upset in Massachusetts. Now they've got to find another way if health care changes are to pass.

Hence the president's call for a conference with both sides plus health care experts to compare "their ideas, our ideas ... in a methodical way so the American people can see and compare."

They also can see and compare the cost of doing nothing in the projections published this month by the journal Health Affairs, covering the increasing share of government spending on health care. That's based on the impact of the recession and unemployment, Medicaid spending and the aging baby boomers who will turn 65 and become eligible for Medicare.

The report estimated national health care spending at $2.5 trillion in 2009, or 17.3 percent of the economy after the sharpest one-year increase in 50 years.

By 2020, health spending is expected to reach $4.5 trillion a year and account for about 20 percent of the economy.

Add to that the biggest tax break the government offers, $155 billion in taxes spared on employer-paid health insurance premiums. That exemption benefits 162 million Americans, and even a hint of changing that stirs a political firestorm, as it has in the current debate about limiting the deduction so as to tax part of the premium on the highest-cost, so-called Cadillac health insurance plans.

Overall, those trends point to higher health care expenses than any national budget can afford. But the case for change collides with the hard political lines already drawn on the issue.

Obama's effort to bend them "and arrive at some agreements" to get bipartisan action on health care is a long shot. He told supporters that he never underestimated the problems and political risks of pushing health care reform.

"I knew this was hard," he said. "You don't think I got warnings?"

President Bill Clinton tried it, and paid. He couldn't even get a vote on his bill, in a Democratic Congress. And the failed drive for universal health care hurt Democrats in the 1994 midterm elections in which Republicans won control of Congress.

Anything approaching a replay in the 2010 elections would push the issue off the table, despite the need for change to ward off unsustainable costs. About 30 years ago, House Speaker Thomas P. "Tip" O'Neill pronounced Social Security to be "the third rail of American politics" ---- perilous to touch. Eventually it was changed to control costs but only when the alternative was crisis.

Short of some kind of action this time, health care could become the new third rail.

WALTER R. MEARS is an Associated Press special correspondent. He reported on government and politics for the AP for more than 40 years. He is retired and lives in Chapel Hill, N.C.