White House Official: 72 Million Uninsured by 2040

Without healthcare reform legislation, the number of uninsured in the United States will rise from the current 46 million to 72 million by 2040, according to Christina Romer, chair of the White House Council of Economic Advisers, who was the lead-off witness before the House Education and Labor Committee this week.

The hearing, the first full committee hearing this week of the three House committees that released an 852-page healthcare reform draft last Friday, focused on the potential impact of reform on a variety of groups: Small business, consumer, academic, and healthcare. The Energy and Commerce Health Subcommittee held hearings as well.

Romer noted that healthcare expenditures are currently 18% of the gross domestic product (GDP), "by far the highest of any country," she said. By 2040, without reform, healthcare could roughly account for one-third of the total output of the American economy, she said.

For Medicare and Medicaid, government spending for healthcare would lift from 6% to 15% of the GDP by 2040. Only about one-quarter of that increase would be related to demographics; the rest of that increase would be linked to healthcare spending that is rising more quickly than the GDP, she said.

"When we talk about slowing growth rate of cost, we talk about doing it through efficiency. And the crucial part is that as good as the American system is, we do feel there is a lot of inefficiency," Romer said. The current healthcare system has up to about 30% that is "just being wasted," which means there is “a lot of fat that can be cut out without diminution of care."

If inefficiency was eliminated at the rate of about 1.5% a year, it would take about 25 years to totally eliminate it. "One-and-a-half percent may sound small, but it's enormous in terms of its effects of the economy," she said.