One in ten Americans remains out of work today as the two-year-long Great Recession gives way at last to a slow economic recovery. Dealing with persistent unemployment is one of the top priorities of President Barack Obama and the leaders of Congress. One important way to create jobs is to slow the growth of medical spending. If health care cost increases slow down, then businesses will find it more profitable to expand employment, and workers will more readily move into those new jobs.
Health care reform that reduces premium growth is economic policy as well as health policy. The reform goals of a healthier America are well understood. However, we demonstrate a less emphasized point about the health care reform legislation currently before Congress—if successful, its provisions can lower the costs of business and increase both the number of jobs by 250,000 to 400,000 annually over the next decade and increase wage growth.
Health care reform that includes even more robust measures to contain health care costs could further enhance job creation. In an economy that has lost 5 million jobs in the past year and where wages have stagnated for many years, this is a strong reason to pass health care reform that contains growth in health care costs and modernizes the U.S. health care system.
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