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White House says rise in health costs slower, Obamacare a factor

A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October
A man looks over the Affordable Care Act (commonly known as Obamacare) signup page on the HealthCare.gov website in New York in this October

By Mark Felsenthal

WASHINGTON (Reuters) - President Barack Obama's signature health law has helped spur stronger economic growth by contributing to slower increases in healthcare prices and spending, the White House said on Wednesday.

The White House's assertion of the economic benefits of the law commonly called Obamacare runs counter to the views of many critics, who say it is raising insurance premiums and chilling job creation.

A report by the Council of Economic Advisers (CEA), an office within the White House, said that healthcare spending grew at an estimated average 1.3 percent rate per capita over the three years since 2010, the lowest rate on record for any three-year period.

It said the law has contributed to slower growth in healthcare prices because of a provision that reduces overpayments of the Medicare program for the elderly to private insurers and medical providers. Reforms that have cut the rates at which people are re-admitted to hospital have also helped, it said.

But a spokesmen for U.S. House of Representatives Speaker John Boehner, a Republican from Ohio, said in response that a January study by the Centers for Medicare and Medicaid Services cited the recession, rather than the health law, as responsible for slow growth in health spending.

"The government's non-partisan actuaries report this is the result of the terrible economy under President Obama, not his health care law," Boehner press secretary Brendan Buck said in an email. "The White House is, in effect, celebrating its own failure to create jobs."

The CEA report coincides with the administration's struggles since the October 1 rollout of online insurance exchanges, or marketplaces, under the Affordable Care Act, which was passed in 2010. Technical problems with the website HealthCare.gov, the main portal for enrollment, have fueled calls to delay the program and given fodder to Republican Party critics who have repeatedly tried to scrap what is a landmark domestic policy achievement for Obama and his Democratic Party.

The White House said that healthcare price inflation is also at its lowest rate in 50 years, about 1 percent on a year-over-year basis based on the personal consumption expenditure index.

CEA Chairman Jason Furman told reporters that slower increases in healthcare costs is one of three areas contributing to stronger economic growth along with energy production and technology advances.

The CEA report said employers would spend less on insurance for employees. But Republicans have pointed to the high level of part-time employment as evidence businesses are cutting hours for staff in response to the new law, which will eventually require them to offer health insurance for full-time workers.

(Editing by Grant McCool)

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