- The Washington Times - Tuesday, June 2, 2009

Slowing the annual growth rate of health care costs by 1.5 percentage points would save the average family $2,600 annually, according to a White House report scheduled to be released Tuesday.

The White House’s Council of Economic Advisers (CEA) said families would save $2,600 in 2020 and $10,000 by 2030.

The group argues that cutting the health care growth rate would slow the increase in the federal budget deficit, lower the unemployment rate, increase the labor supply and improve economic well-being, all of which would have positive benefits to the economy.

Cutting the annual growth rate would increase the country’s gross domestic product by more than 2 percent in 2020 and 8 percent in 2030.

The Council’s report isn’t based on any particular reform plan being proposed, but instead based on President Obama’s goal to reduce the health care cost growth rate by 1.5 percent.

That’s the same pledge made by a group of trade associations at the White House last month.

The report does, to some extent, advocate for expanding insurance coverage.

“There is no way that we can expand coverage if [costs] are not under control,” said Christina Romer, chairwoman of the CEA, in a conference call with reporters. “Expanding coverage is part of the way that we can get the slowing of the growth rate of health care costs.”

“If we do reform well — if we make the tough choices to [slow the rate of increase] the key impact is, it’s very good for the economy,” she said. “How this will all play out is unknown.”

The CEA argues that “genuine health care reform” — which it doesn’t fully define — would raise standards of living by improving efficiency; raise the national saving rate; lower the unemployment rate and improve the function of the labor market with healthier employees; and increase the economic well-being of the uninsured.

There are about 46 million Americans without health insurance.

CEA estimates that without health care reform, that figure would likely rise to 72 million in 2040, adding that small businesses tend not to provide coverage.

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