Health care reform will cost how much?!?
The health care reform package that passed this week promises to promote sweeping change in the health care industry and in the lives of health care consumers. But all that change is going to cost a lot of dollars. How big will the bill for health care reform be? It’s estimated to cost about $940 billion over the next 10 years. That includes:
- $434 billion for expansion of Medicaid and Children’s Health Insurance Plans enrollment
- $466 billion for subsidies to fund insurance for individuals and families up to 400 percent of the federal poverty level (which was $22,050 for a family of four in 2009)
- $40 billion for small employer tax credits
The health care reform package also includes proposed ways to fund reform, mostly through penalties and taxes. Proposed funding includes:
- $328 billion in reduced Medicare scheduled payments and Medicare Advantage cuts
- $210.2 billion in Medicare payroll tax increases
- $70 billion from premiums for long-term care program
- $69 billion in penalties paid by individuals and employers that don’t buy insurance
- $60 billion in market share taxes on insurance companies
- $36 billion in cuts to Medicare and Medicaid Disproportionate Share payments
- $32 billion from taxes on “Cadillac” health plans
- $27 billion from taxes on brand-name pharmaceutical companies
- $20 billion from taxes on medical devices starting in 2013
If you’re interested in the tax provisions of the health care reform bill, read tax firm Deloitte’s comprehensive report.
The coming months will tell us more on how much health care reform will cost and how it’s going to be paid for. What do you think? Does the package contain adequate ways to fund reforms?