The Shape of Tax to Come

A Tax & Estate Planning blog for 21st-century Texans

How the Health Care Bill is Financed

The Tax Policy Foundation has produced an informative graph that shows the six years of ObamaCare will be funded over the next ten years. Of particular note is the $416 billion that will be cut from Medicare over the next ten years.

Main Components in Net Cuts to Medicare ($416.5 billion)

Reductions in annual updates to Medicare FFS payment rates = $196 billion cut
Medicare Advantage rates based upon fee-for-service rates = $136 billion cut
Medicare Part D “donut hole” fix = $42.6 billion increase
Payment Adjustments for Home Health Care = $39.7 billion cut
Medicare Disproportionate Share Hospital (DSH) Payments = $22.1 billion cut
Revision to the Medicare Improvement Fund = $20.7 billion cut
Reducing Part D Premium Subsidy for High-Income Beneficiaries = $10.7 billion cut
Interactions between Medicare programs = $29.1 billion cut

Main Components in Other Provisions ($149 billion)

Associated effects of coverage provisions on revenues = $46 billion
Exclusion of unprocessed fuels from the cellulosic biofuel producer credit = $23.6 billion
Require information reporting on payments to corporations = $17.1 billion
Raise 7.5% AGI floor on medical expenses deduction to 10% = $15.2 billion
Limitations to the use of HSAs, MSAs, FSAs, etc. = $19.4 billion

Also of note is the federal takeover of the federal student loan process. This was included in the CBO estimate as a net $51 billion dollar cut that was needed to get the bill scored at less than $1 trillion.

From the Tax Policy Foudation

Read the full article here.

March 29, 2010 Posted by | Uncategorized | Leave a comment


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