Washington Piece by piece, the stage is being set for the long-overdue effort to rebuild America's creaky health care system into one that can meet the needs of the 21st century. It probably won't happen until 2009, but the outlines of the big change are starting to become clear.
As is always the case, the driving force is coming from the people. More and more families are experiencing the terror of living without health insurance - 47 million uninsured at last count. And additional millions are facing rising premiums and co-pays that strain family budgets.
As the costs rise, more and more employers are bailing out of providing health coverage, and the pressure for help from government is rising. With Congress wary of systemic reform after the collapse of the Clintons' initiative in 1994, states are being forced to improvise their own solutions.
Last year, Massachusetts, with Republican Gov. Mitt Romney and the Democratic Legislature collaborating, devised a plan to provide coverage for all its residents. Now, the first cost estimates have come in, and monthly premiums are projected to be almost twice as expensive as Romney predicted. It's not clear whether the plan can go forward.
Meantime, California's Republican Gov. Arnold Schwarzenegger has offered his own universal coverage proposal - based on the Massachusetts model - to tackle the much larger challenge of his state's millions of uninsured. The Democratic Legislature is studying it, and its fate is uncertain.
Both the Massachusetts and California plans step away from the 65-year-old pattern of tying health insurance to the place of employment, a historical oddity now visibly failing in this far more mobile society. Instead, these plans require every individual to purchase health insurance, with subsidies as needed to be financed by government, business and, in Schwarzenegger's plan, hospitals and doctors.
A major barrier to all such schemes is the feature of the federal tax code that subsidizes job-based health insurance by making its cost deductible to the business and tax-free to the employee. As C. Eugene Steuerle of the Urban Institute testified to Congress last week, this represents a $200 billion-a-year subsidy, with most of the benefits going to the well-to-do - a sum that could be much better spent on helping the uninsured.
President Bush this year has proposed a partial fix of that problem, by substituting a flat deduction for the value of every health insurance policy costing the employer and worker up to $7,500 a person. He would use the savings to help lower-income workers buy policies.
Rep. Jim McCrery of Louisiana, the ranking Republican on the House Ways and Means Committee, joined many Democrats in saying that Bush's proposal can be improved by using tax credits, rather than deductions, to distribute the benefits.
But the door has been opened by the president to a negotiation that could lead to a conversion to individual insurance, along with a guarantee of universal coverage. Democratic Sen. Ron Wyden of Oregon, who has written and vetted a plan for doing just that, told me last week that his conversations with some Republican colleagues convinced him that "there may be a window this year" for moving such a bill.
Chances are, however, that this session, Congress will simply renew and expand the existing program that provides health insurance for children. There is bipartisan support for that measure, and one of the newly formed coalitions of business, labor, consumer and provider groups has called for that as a first step toward covering everyone.
Last October, health care experts Drew Altman and Robert Blendon wrote that "the presidential candidates' level of attention will be decisive to where health ranks on the national agenda going into the 2008 election and the 2009 Congress. If they do play a leadership role on health, the media will follow, and the agenda-setting power of a debate driven from the top will meet the public's concern rising up from the bottom like two weather fronts colliding."
Exactly that is happening. As he seeks the GOP nomination, Romney is touting his plan for universal coverage, and last month, Democratic Sen. Barack Obama committed to the same goal - without saying how to get there. On her first trip to Iowa, Sen. Hillary Rodham Clinton showed her mastery of the subject, explaining what had gone wrong in 1994 and the lessons learned.
The bar has been raised to the point that any presidential candidate in either party without a plan for universal coverage may be seen as falling short. And that in turn could make 2009 the long-awaited breakthrough year.