Reforming healthcare will give a shot in the arm to the U.S. economy, according to a new report touted by President Obama’s chief economic counselors.
Reforms would boost the U.S. economy by 8 percent by 2030 by reducing the rate of growth in national healthcare spending, the report concludes.
“We’re talking about very serious amounts of money,” Christina Romer, the chairwoman of the council, told reporters on a conference call Monday.
Healthcare reform has emerged as Obama’s foremost domestic policy initiative, and the political debate is about to heat up. In the coming eight weeks, Democrats in Congress plan to introduce and pass comprehensive reform legislation with the goal of presenting Obama with a bill to sign by year’s end.
The report comes a day before Obama is scheduled to meet with Senate Democrats to discuss healthcare, along with a press conference at which White House officials and Senate Democrats will unveil the economic report.
“Bending the cost curve” by reducing the future rate of growth in healthcare spending is one of the central pillars of Obama’s healthcare reform principles and sits alongside his aim to get every American health coverage.
“Health care expenditures in the United States are currently about 18 percent of GDP, and this share is projected to rise sharply. If health care costs continue to grow at historical rates, the share of GDP devoted to health care in the United States is projected to reach 34 percent by 2040,” the report says.
Rather than focusing his rhetoric entirely on covering the uninsured, Obama has sought to win the support of middle-class voters who already have health insurance by persuading them that lower healthcare costs will benefit them by making their coverage more affordable.
To that point, the report claims that healthcare spending reductions on such a scale would save a family of four $2,600 in 2020 and $10,000 in 2030. Higher healthcare costs for employers and workers, the report further notes, translate to lower wages.
The White House also says the lower-than-projected healthcare spending will lead to lower unemployment by one-quarter of a percentage point for a “number of years” and would make it easier for the uninsured to obtain coverage by making insurance less expensive.
Obama also argues that the rapidly escalating costs of healthcare are harming the competitiveness of American businesses and threatens the long-term fiscal condition of the federal government. With Medicare and Social Security projected to go bankrupt under current assumptions, Obama asserts that addressing healthcare costs could save them.
“If we don’t do this, we’re going to be facing a huge mess in 30 years,” Romer said. “The nightmare scenario is getting closer,” she added, emphasizing that the Council looked at the long-term effects of healthcare reform, not the short-term increases in federal spending needed to bring Obama’s vision into place.
The White House is hoping to generate a lot of attention from this report. On Tuesday morning, Romer will formally present the council’s findings at a media event alongside Senate Finance Committee Chairman Max BaucusMax BaucusFive reasons why Tillerson is likely to get through Business groups express support for Branstad nomination The mysterious sealed opioid report fuels speculation MORE (D-Mont.), Sen. Chris Dodd (D-Conn.), White House Office of Health Reform Director Nancy-Ann DeParle, White House Office of Management and Budget Director Peter Orszag and National Economic Council Chairman Larry Summers.
Obama will meet with Baucus and other Senate Democrats at the White House Tuesday afternoon.
The White House provided the economic report to the press just hours after six healthcare industry groups presented the president with a 28-page set of recommendations on how to decrease healthcare spending growth by reducing the use of medical services, better treating chronic diseases and trimming administrative costs.