(Editor’s note: Unfortunately, healthcare costs will not be “reined in” if and when Obama’s legislation is passed. Medicare and Medicaid are what’s known as a “third-party payment system,” which means there’s little incentive for either the provider or the end user to curtail costs because someone else is paying for it and there’s effectively no price competition.)

ABC’s Karen Travers reports from Washington:

President Obama told ABC News’ Charles Gibson in an interview that if Congress does not pass health care legislation that will bring down costs, the federal government “will go bankrupt.”

The president laid out a dire scenario of what will happen if his health care reform effort fails.

“If we don’t pass it, here’s the guarantee….your premiums will go up, your employers are going to load up more costs on you,” he said. “Potentially they’re going to drop your coverage, because they just can’t afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year. “

The president said that the costs of Medicare and Medicaid are on an “unsustainable” trajectory and if there is no action taken to bring them down, “the federal government will go bankrupt.”

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