THE COST of employee health insurance rose more than 20 percent for the second year in a row last year, according to a survey by a consulting firm. Another survey, by the Health Insurance Association of America, puts the increase at about 15 percent, but the head of the insurers' group concedes that "the problem is serious, no matter whose statistics you use."

Health care costs are the great rogue force in the economy. They now equal roughly $1 of every $9 Americans spend, and the share is rising; they are eating into the incomes -- the ability to buy other goods and services -- of all payers, including government. It is not just employers (and employees and customers, to whom they pass along the costs) who have a higher bill to pay. If present trends continue, Medicare early in the next century will be the government's largest domestic program, surpassing even Social Security; Medicaid is already the largest program for the poor as well as the fastest-rising major item in the budgets of most states.

Yet a mostly poor eighth of the population still lacks all health insurance. Millions of poor and near-poor Americans are not well cared for, and the costs of their care are as much avoided as met. As a society, we simultaneously spend too much and miss too many. The system needs reform; reform will only come when a determined administration focuses on and pushes for it and not easily then; and this administration, not just for fiscal reasons, has thus far put the subject off. In last year's State of the Union message, the president asked his health and human services secretary for a review of the "quality, accessibility and cost of our nation's heath care system," saying "I am committed to bring the staggering costs of health care under control." The review is still underway, even as in some respects in recent years the federal government has exacerbated the problem.

To protect itself as insurer, the government has placed new limits on what it will pay hospitals and doctors under Medicare. Employers and private insurers have taken similar steps, and the states, under pressure from Congress to cover more of the poor, have cut back Medicaid payment rates as well. Hospitals can't shift costs as they used to; they end up not just overbuilt, as many are, but undercompensated. In many states they and other providers have gone to court to force Medicaid rates back up.

Reform may require some increase in the dollars spent, but it cannot consist just of that; it will require a reallocation as well. The matter is not going to be resolved in a single Congress nor in a single presidential term. But the state of the union as to health care is not good.