The role of the Federal government is very simple, and is outlined in the Constitution in Article 1, Section 8. Congress’s only roles are to establish national security (defense) and commercial regulation in all its forms including bankruptcy law, patent law, banking regulation, foreign trade, etc. And that is it! Everything else legislated by Congress jeopardizes the very idea of democracy.
Because I am compassionate, I accept a very minimal social safety net, as opposed to entitlements. A safety net should keep people from suffering, but should not allow some to live the good life on another’s dime.
The best prescription for healthcare, as part of that social safety net that most of us agree is needed, is to convert the industry to a utility. Just like electric, gas and communications utilities, healthcare would be subect to regulated fees at the state level to some minimum federal level of service. This preserves the sovereignty of the states (which will be the subject of at least one Constitutional challenge of Obamacare) that are expected to administer the current and future Medicare, but without additional funding by the Feds.
The big advantage of state-administered healthcare programs is that it keeps decision making closer to the taxpayers and beneficiaries, and preserves the opportunity for innovation amongst states. One state might find a better way than another and pass that approach along. This, along with multiple private administrators of the programs, much like multiple telecom carriers, will preserve the benefits of competition.