U.S. health insurance gap to widen without action: CBO

By Donna Smith

WASHINGTON (Reuters) - The number of Americans without health insurance could rise by almost 10 million to 54 million in a decade if lawmakers fail to quickly enact policies that rein in costs and expand coverage, Congress' top budget analyst said on Wednesday.

Douglas Elmendorf, director of the non-partisan Congressional Budget Office, told the Senate Finance Committee it may be decades before costs savings are realized from any overhaul of the $2.3 trillion U.S. healthcare industry.

If lawmakers fail to act, the number of Americans under the age of 65 without health insurance could rise to 54 million in 2019 from about 45 million now, he warned.

President Barack Obama has vowed to push this year for a revamp of the $2.3 trillion U.S. healthcare system to rein in soaring costs and provide more insurance coverage despite a deep economic recession and an exploding budget deficit.

Administration officials say the path to controlling those deficits and improving the United States' global economic performance lies through overhauling the healthcare system.

Elmendorf told the Finance Committee, which will play a crucial role in developing healthcare legislation, that it may be a long time before any costs savings are realized.

"While coverage could be substantially expanded in a few years, it could take many years or even decades for the ... changes needed to improve the system's efficiency to come fully to fruition," Elmendorf told the committee. He said lawmakers need to act now because of long lead times needed to make changes.

That will make it difficult for Obama to honor his pledge to both expand health coverage and cut an anticipated $1.2 trillion budget deficit in half by the end of 2013.

Elmendorf said a number of studies have shown that the bulk of healthcare cost growth is from new treatments and technologies, but he also suggested a lot of spending may be wasted.

"The available evidence also suggests that a substantial share of spending on health care contributes little if anything to the overall health of the nation," Elemendorf said in testimony.

Elmendorf suggested a number of ways to help control costs and improve care, including establishing a payment system that creates incentives to control costs while rewarding a better quality of care.

The CBO director suggested policy-makers set up demonstration programs to help determine the best approach.

(Editing by Doina Chiacu)