There's a lot of talk lately about revamping our health care system to address its outrageous costs and the millions of uninsured.

In Tuesday's State of the Union speech, President George W. Bush brought up no fewer than three approaches to making health insurance more affordable for individuals and small business. The governors of California and Pennsylvania are following Massachusetts with state mandates for universal health insurance, and other states are looking at similar legislation. Senator Edward Kennedy (D.-Mass.) is talking about a federal system based on the new Massachusetts model. Ron Wyden (D.-Ore.) is floating a proposal to create a national health insurance system. Meanwhile, an unlikely coalition of business, labor, healthcare and advocacy groups has endorsed a combination of federal aid and tax incentives to help cover the estimated 47 million uninsured Americans.

Does this mean that at long last lawmakers, business leaders and policymakers are going to solve the No. 1 issue for small business owners: out-of-control health insurance costs?

Probably not. At least not soon. The politics are too dicey to predict a clean solution.

But behind all the grandstanding and initiatives, something serious is under way. Forces from the left, right and center are coming together to fix or replace the system of employer-supplied health insurance that has provided most Americans families with coverage for 60 years.

For a while, American healthcare was the envy of the world. But starting in the 1980s, premiums began to soar and the system began to fray. Small businesses felt the squeeze as rates for small group plans rose faster than premiums for big employers. In the past decade, small businesses began dropping coverage: Now, just 60 percent of businesses with 200 or less employees do, according to a 2006 study by the Kaiser Family Foundation. And that has swollen the ranks of uninsured working Americans to 27 million, according to the National Foundation of Independent Businesses (NFIB),

President Bush's newest proposal is a tax credit designed to encourage the uninsured to buy policies on their own. The tax break would be paid for by for the first time taxing health care benefits when they exceed a certain level, which the President says will control premium inflation by discouraging "gold-plated" coverage.

Experts believe this proposal is dead on arrival. "I would call the chances of passage negative," says Michael Fronstin, senior research associate at the Employee Benefits Research Institute, an industry group. Beyond the awkward politics of suddenly taxing a cherished employment benefit enjoyed by millions of middle-class voters, Fronstin says the plan is flawed, because it would leave millions of Americans to fend for themselves in the "dysfunctional" very-small-group and individual health insurance market, where rates are high, buyers have no leverage and insurers can deny coverage. It also might, he says, encourage employers to stop offering insurance altogether. "This proposal, if adopted, would be the beginning of the end of employee-based health coverage as we know it."

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