Suddenly, the hot potato of health care reform is being grabbed with bare hands by lawmakers of every political stripe and by coalitions of employers, unions, insurers, and medical and consumer groups that have rarely seen eye to eye on the issue.

Now, after half a century of failed attempts, the momentum toward universal health coverage—within states or nationwide, through public or private systems or a combination of both—has surged onto the national stage, having recently percolated up from the states.

In particular, the bold actions taken by Massachusetts, Vermont and California—states with Democratic-controlled legislatures and Republican governors—are leading a groundswell for change. California Gov. Arnold Schwarzenegger has proposed extending coverage to the 20 percent of residents who now lack insurance. The plan requires residents to get health insurance and employers to provide coverage for workers or else contribute to the cost of covering the uninsured. It caps administrative spending by insurers, raises payments to hospitals and doctors and imposes a new tax on them. Massachusetts is grappling with the realities of a similar, though less ambitious, law enacted last year under then-Gov. Mitt Romney.

The new mood for reform is coming from employers and state governments struggling under rising health care costs; from policymakers wanting to replace the fragmented system with a unified one that covers everybody; and from the uninsured, a group that now approaches 47 million.

But there is another group that eventually may exert a more powerful impact on the debate: people who have coverage but sense that it's dangling by a fraying thread.

"The core motivation [for reform] is that for the last few years health insurance premiums have been going up faster than earnings," says Paul Ginsburg, president of the Washington-based Center for Studying Health System Change. "That means there are a lot of people who have insurance but feel vulnerable to losing it."

The stark realities of U.S. coverage

• About 18,000 people a year die prematurely because they lack insurance.
• People file for bankruptcy at a rate of one every 30 seconds because of medical bills.
• The average employer-based family premium rose 87 percent from 2000 to 2006, to $11,500.
• Fewer than 60 percent of people under 65 have employer coverage, down from 70 percent in 1987.

In Pennsylvania, for example, family health premiums increased by 75.6 percent from 2000 to 2006, compared with a 13.3 percent increase in median wages.

Among the most vulnerable are 50- to 64-year-olds not yet eligible for Medicare, currently the nation's only universal health care program. People in this group are the most likely to have job-based insurance. But those who don't have that coverage—or lose it—are typically ineligible for public assistance programs such as Medicaid and must buy insurance on their own. And in the individual market in 38 states, insurance premiums can be pegged to age.

"So even if you're in perfect health and run 10 miles a day, you get charged a lot more just because you're older," says Karen Pollitz of the Georgetown University Health Policy Institute.

Premiums for individuals vary by plan and region, but here's an example of age rating from eHealthInsurance.com. For the same coverage by a Maryland HMO, a married couple of the same age (both nonsmokers) would pay monthly premiums of $612 at age 40, $961 at 50, $1,501 at 60 and $1,719 at 63.

Surcharges don't end with age. In most states, insurers can charge higher premiums or deny insurance entirely if the applicant has a preexisting condition, which could be a long-ago cancer or simply the use of a drug to lower cholesterol. The California plan, like that of Massachusetts, would prohibit the denial of coverage based on age or health status.

Such a ban could especially help boomers who are of an age when health problems tend to increase. Right now, in the individual market, "the insurance system is just slamming the door in their faces by denying availability, affordability or adequacy of coverage," Pollitz says. How many people on their own, she asks, can afford a treatment costing more than $100,000 that's not covered?

In today's piecemeal system, "we're all just a pink slip away from being one of the uninsured," says Michael Campbell, executive director of the Pennsylvania Health Law Project, a nonprofit group that counsels workers forced into early retirement by downsizing. They lose their employee insurance, and then one day they "feel a lump or get a dangerous diagnosis," he says. "Their choice is to wait for Medicare at age 65 or spend down their retirement nest egg. It's a tough call."

You can lose your job-based coverage if:

• You're laid off.
• Your spouse, whose plan at work covers you, dies.
• You and your insured spouse divorce.
• Your parents' policy no longer covers you.

 You can lose your individual policy if:

• The rates become unaffordable.
• You are preapproved for major treatment but after you've had it, the insurer cuts you off and refuses to pay.

You can be denied coverage if:

• You have a health condition.
• You take a drug that prevents disease but suggests an underlying condition.
• Your occupation is considered high-risk.
• Your records show treatment long ago for a condition that was minor, misdiagnosed or a clerical error.

"The list of problems in our extraordinarily expensive system is shocking," says Helen Darling, president of the National Business Group on Health, which represents large employers. "We get so little for what we put in, compared to well-off European countries [that] deliver quality health care for half what we pay." Large companies say the price of providing health care—an average of $8,400 for each employee, Darling says—makes them less competitive abroad.

There's also the cost of not providing coverage. When uninsured people are treated in emergency rooms—the costliest kind of care—and can't pay, the hospital bill is often paid through tax-funded state programs. But in many cases, says Paul Fronstin of the Employee Benefit Research Institute in Washington, "the hospital raises its rates for people with insurance coverage in order to recoup that cost."

So in many ways, Darling says, "everybody is negatively affected by rising costs." And it's the universality of the problems that has led to alliances of odd bedfellows. Several groups have set aside their differences to persuade political leaders to fix what they see as a broken system.

Among them is the new Divided We Fail campaign, a coalition formed by AARP, Business Roundtable and the Service Employees International Union. "We intend to make health and financial security front-and-center issues in every race" in the 2008 elections, AARP CEO Bill Novelli said at the campaign's launch in Washington. John Castellani, president of the Roundtable, which opposed AARP's position on private accounts in Social Security two years ago, now says: "We feel we have much more in common than disagreement" on these health and financial issues.

In the past, many groups fought each other to get the kind of health reform each wanted, says Ginsburg of the Center for Studying Health System Change. "And they've gotten nothing," he says. "But now there's a spirit of compromise, a willingness to take half a loaf and maybe achieve something."

Proposals for overhauling health care vary widely, but some themes are percolating up in the debate:

• Require all state residents to have health insurance.
• Require in-state employers to provide health insurance for workers or pay into a state fund that covers the uninsured.
• Require insurers to provide affordable coverage without regard to health status, age, occupation or gender.
• Offer discounts for people who use preventive care and maintain healthy lifestyles.
• Extend Medicare to anyone under age 65 who has no comparable employer coverage.
• Give tax deductions or credits to help people buy insurance.
• Provide coverage to all uninsured children.

Closing gaps in the system and finding ways to pay for the fixes are a huge challenge. But over the past year, at least half the states have proposed some kind of initiative to reduce the number of uninsured, or have appointed task forces to look at options. A few have already acted. In Vermont, voluntary coverage for uninsured residents through a state-run health plan begins in October. Last July, Illinois became the first state to start a program to provide comprehensive medical care to all uninsured children.

The mood for reform has also prompted a wide range of proposals at the federal level. Sen. Ron Wyden, D-Ore., has introduced a bill giving all Americans the same private coverage that members of Congress receive. Some Democrats, such as Sen. Edward Kennedy (Mass.), favor a government-run, Medicare-for-all system.

President Bush has proposed giving people who buy their own health insurance the same tax breaks as those with employer coverage. He would also cap tax deductions for health insurance at $7,500 a year for singles and $15,000 for families—a tax increase for those with generous employer plans.

All these ideas face political and financial hurdles, and most analysts expect nothing major from Congress before a new president takes office in 2009.

Meanwhile, polls show that health care is consistently a top issue for voters. Overall, Americans are skeptical about any unified system, says policy analyst Robert Blendon of Harvard's School of Public Health. But it's clear, he says, that "people would like government to make their coverage more secure and to deal with some of the things that make it more expensive."

The mood for reform, he adds, "is the birth of what will be an issue in the 2008 elections. People expect to see health care addressed seriously."