WASHINGTON - Overhauling the U.S. healthcare system to contain soaring costs and expand medical coverage to the uninsured would help boost U.S. economic output, lower budget deficits and raise workers' incomes, a White House report said on Tuesday.

A report by the White House Council of Economic Advisers said healthcare spending, which currently accounts for about 18 percent of the country's economic output, could reach 34 percent by 2040 if the current rate of cost growth continues. It said that kind of growth rate was unsustainable.

Healthcare reform is incredibly important not just for the American people but for the American economy, said White House economic adviser Christina Romer.

We need to get the growth rate of costs down significantly, she said in a telephone conference.

Most working Americans with health insurance get it through their employers and the study said that rising costs increase insurance premiums and cut into workers' wages. A reform that reins in costs would improve economic efficiency and increase economic output by more than 2 percent in 2020 and by 8 percent in 2030, the report concluded.

That would translate into $2,600 in higher income for a family of four in 2020 and $10,000 by 2030, the report said. Since about half of healthcare costs are paid by federal, state and local governments, their budgets also would benefit greatly by reform, it said.

Providing medical coverage to the uninsured will also help the economy by improving the overall well-being of the work force, Romer said.

The net benefit minus the cost (of insuring the uninsured) is about $100 billion a year, she said.

Without the overhaul, the number of uninsured Americans would rise to about 72 million in 2040, the report said.

President Barack Obama has made healthcare reform a top domestic priority and wants Congress to enact legislation by the end of the year.

The White House is stepping up its efforts to build support for the overhaul as key committees in the Senate and House of Representatives begin drafting legislation.

The report, which is expected to be highlighted at a White House event on Tuesday, will help Obama make the case that the healthcare overhaul will help the overall U.S. economy and make U.S. companies more competitive in global markets.

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