WASHINGTON President Barack Obama told a joint session of the U.S. Congress on Tuesday his budget plan this week would include a "down payment" on the principle that all Americans should have access to affordable healthcare.
Obama said money from the $787 billion (541 billion pound) economic stimulus plan approved by Congress would be used for research to fight cancer and to computerize health records.
But he said the rapidly rising cost of health care made broader changes an economic imperative.
"Health care reform cannot wait, it must not wait, and it will not wait another year. This budget builds on these reforms," he said.
"It includes an historic commitment to comprehensive health care reform -- a down payment on the principle that we must have quality, affordable healthcare for every American."
Obama promised during his campaign to work to extend health insurance to many of the 46 million Americans who do not now have it. His budget for the 2010 fiscal year, due out on Thursday, will begin to lay out a timeline for this.
The United States spends more than $7,400 per person on healthcare each year. That amounted to 18 percent of gross domestic product in 2009, according to the Centres for Medicare and Medicaid Services.
The CMS, which administers federal and state health insurance plans, says healthcare spending will hit more than $2.4 trillion this year.
Yet studies show Americans in general do not get better care than people in countries that spend less.
Improving medical care will help stimulate the economy as well as to reduce the $1 trillion budget deficit, Obama said.
"It's a commitment that's paid for in part by efficiencies in our system that are long overdue."
This includes eliminating fraud and waste but also by promoting prevention that can save lives by stopping people from getting expensive diseases in the first place. Electronic medical records and prescriptions can also save money and reduce costly errors, according to many experts.
Obama noted that high medical bills are one of the main causes of bankruptcy in the United States. "By the end of the year, it could cause 1.5 million Americans to lose their homes," he said.
The cost of health insurance premiums has grown four times faster than wages and the cost is crippling small businesses and driving jobs to countries with lower costs and national health insurance systems, he said.
Republican Senator John McCain, who also made healthcare reform an issue his losing presidential campaign against Obama, said he would help.
A member of the Senate Committee on Health, Education, Labour and Pensions, McCain said in an interview after the speech that he felt an accord is reachable this year.
"I do think it's possible, because I think that the inflation associated with health care is so severe, as the president correctly stated, it's affecting all of our economy," McCain said. "Certainly a lot of us are eager to work with the president on that issue."
(Reporting by David Alexander, Steve Holland and Maggie Fox)