Obama's focus to shift to health care

WASHINGTON — President Obama will convene a White House meeting next week to address runaway health-care costs. On Monday he called it key to reining in federal spending as he tries to balance plans to spend the country out of a recession with shoring up its long-term fiscal health.

Obama announced his plans for the health-care meeting as he met at the White House with lawmakers, economists and union officials to discuss his promise to cut the federal budget deficit in half by the end of his first term while simultaneously addressing longer-term problems. The event was billed as a "fiscal responsibility summit."

As Obama tries to cut the nation's $1.4 trillion budget deficit, rising health-care costs and the government's rising stake in health coverage will prove a difficult obstacle to work around.

"We've got a lot of hard choices to make," the president said, urging a broad group to keep meeting in the weeks ahead to forge agreements on such intractable budget problems as health-care spending and shoring up Social Security. His health-care summit will be held next week.

One top budget analyst told the group health-care spending is the No. 1 culprit.

"The single biggest factor is rising health-care costs, not just in Medicare and Medicaid," said Robert Greenstein, the executive director of the Center on Budget and Policy Priorities, a nonpartisan research center.

Meanwhile, a new government report on medical costs said 6 million Americans are expected to lose private coverage by the end of next year, while Medicaid, the national health program for low-income Americans, will beef up its enrollment to pick up much of the slack, analysts reported Monday.

Program spending is expected to jump 9.6 percent from $352 billion last year to $386 billion this year, according to an annual U.S. Department of Health and Human Services report.

The 3.4 million people who are expected to lose private coverage this year — and an additional 2.6 million next year — include not only workers and their families, but also Medicare recipients who no longer can afford supplemental coverage.

Obama told those at the National Governors Association meeting in Washington that he'd provide $15 billion to help cash-strapped states pay their share of growing Medicaid payments.

Joblessness and slower wage growth will cause a dip in payroll tax revenues that could push the insolvency date for Medicare's hospital insurance fund from 2019 to 2016, said Richard Foster, of the Centers for Medicare and Medicaid Services.

The spending projections outlined Monday don't factor in the recent expansion of the State Children's Health Insurance Program or the new economic stimulus bill and its subsidy for COBRA insurance coverage.