U.S., states to pay at least half of health care bills by 2012

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

Federal and state programs will pay slightly more than half the tab for health care purchased in the United States by 2012, according to a report by Medicare number crunchers being released Thursday.

That’s even if President Obama’s health care overhaul is not passed. 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 published in the journal Health Affairs.

The tipping point is likely to come next year, Mr. 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 the government - at the federal and state level - probably will end up picking up the majority of the nation’s medical costs in 2011, instead of 2012.

The report could serve as a reality check in the debate over Mr. Obama’s health care plan, which has been dominated by disagreements over how large a role government should play.

Congressional Democrats want to move forward with the sweeping legislation despite the loss of a Massachusetts Senate seat that cost them total control of the legislative agenda. Republicans have rejected Mr. Obama’s approach as a top-down, big government solution.

The new report estimated that in 2009, the United States spent $2.5 trillion for health care, with government programs - mainly Medicare for the elderly and Medicaid for the poor - paying $1.2 trillion. Employer health insurance and various private sources covered the other $1.3 trillion. But spending by government last year grew nearly three times faster than private spending, closing in to overtake it.

Driving much of the government surge was Medicaid, the federal-state program for low-income people, which grew by nearly 10 percent as workers lost jobs with health insurance, and Democrats expanded coverage for children of the working poor.

Previous estimates had put the crossover point to a health care system financed mainly by taxpayers at 2016. There seems to be little chance that the balance will tip back decisively in the direction of private financing, with the baby boom generation signing up for Medicare and the lack of health insurance at many new jobs.