Christina Romer, chairman of President Obama’s Council of Economic Advisors, made an economic case for health finance reform at a recent House Budget Committee hearing.
“To put it simply, good health care reform is good economic policy,” Romer testified.
“Rising health care expenditures are likely going to lead to rising insurance premiums,” Romer warned. “Another trend that is well known and simply can’t be ignored is the rise in the number of Americans without health insurance. Currently 46 million people in the United States are uninsured. In the absence of reform, this number is projected to rise to about 72 million by 2040.”
Slowing the health care cost growth would help to solve many of the financial problems related to health care, Romer said.
She cited research showing that the United States could cut 30% of health care expenditures without affecting health care quality or outcomes.
“If we restrain costs by eliminating waste and inefficiency, we can have the same real amount of health care with resources left over to produce other things that we value,” Romer said. “This causes standards of living to rise.
Romer also talked about the benefits of making health coverage available to all U.S. residents.
“Expanding coverage and eliminating restrictions on pre-existing conditions could end the phenomenon of ‘job lock,’ where worries about health insurance cause workers to stay in their jobs even when ones that pay better or are a better match are available,” Romer said.
Committee members said they all agree on the importance of slowing the rate of growth in health care spending, but several asked Romer to explain how she would actually slow the growth rate.
Romer declined to give detailed answers to those questions.
“We [do] not want to get ahead of the legislative process,” Romer told lawmakers.
But something must be done, Romer said, adding, “The trajectory we are on for Medicare and Medicaid spending simply cannot last.”