Much of the Baucus version of the Obamacare bill is being paid for by raiding the wallets of America’s seniors, many of whom are on fixed incomes and cannot afford the extra expense.
Half the tab of the Bausus is being paid for via cuts to Medicare. Another provision in the bill would tax the manufacturers of medical devices and replacement parts. Of course those higher costs will be passed on to consumers. Most, Among the items selected be taxed are products mostly used by Seniors including Pacemakers, Hip joint replacements, Powered wheelchairs, Hearing aids, and Prosthetic heart valve rotators.
Who would pay the $829 billion tab for the Baucus plan?
- 47 percent – $426 billion in cuts to Medicare
- 22 percent – $201 billion in taxes on high-end insurance policies
- 20 percent – $180 billion in additional revenue, including annual fees on the pharmaceutical, insurance and medical device industries
- 9 percent – $83 billion in new income taxes
- 2 percent – $23 billion in penalties paid by employers
- Less than 1 percent – $16 billion in revenue from changes in Medicare and Medicaid
- Less than 1 percent – $4 billion in penalties paid by the uninsured
Health care tab to be paid by taxpayers, businesses, seniors
By: Susan Ferrechio
Chief Congressional Correspondent
October 9, 2009take our poll - story continues below
A Senate plan to expand health insurance coverage to an additional 29 million people would not come cheap, with taxpayers, businesses and the elderly poised to foot most of the bill.
The legislation by Senate Finance Committee Chairman Max Baucus, D-Mont., which is scheduled for a committee vote Tuesday, would cost $829 billion over the next 10 years. Yet in spite of that staggering price tag, it would slash the federal deficit by $81 billion, according to an analysis by the independent Congressional Budget Office.
That’s $910 billion the government would have to raise over the next decade. The bill calls for getting half of that money through various taxes and the other half by slashing expenses tied to Medicare, the program that provides health care for Americans 65 and older.
The Baucus bill would raise $201 billion over 10 years through an excise tax on top-tier insurance policies. Beginning in 2013, insurance companies would incur a 40 percent tax on any policy that exceeded $8,000 for individuals and $21,000 for families.
Government coffers would get an additional $23 billion over the next decade from employers with more than 50 workers that don’t offer health insurance. These companies would pay a fine for every employee who qualified for a federal health care subsidy. And anyone who does not have some kind of health insurance would pay a fee, up to $950 for an individual and up to $3,800 for a family, which the CBO estimates would add up to $4 billion in revenues in the coming decade.
The government would also levy more payroll taxes. Included in a footnote in the CBO report is the revelation that the government expects to raise an extra $83 billion in payroll taxes in the next 10 years thanks to the higher taxable wages they predict employers will offer in place of non-taxable health care benefits.
Added together, these new taxes total $311 billion, a number that critics say is far too high.
“They tax us to the point that they reduce the deficit,” said Michael Tanner, a health care policy expert at the Cato Institute, a libertarian think tank. “In essence, the deficit savings you have are simply because of the tax increases.”
Even after taxes, the government would still need an additional $599 billion to achieve the cost-bending estimate provided by the CBO. The Baucus bill calls for getting the bulk of that money from cuts to Medicare spending. According to the CBO, the Baucus bill would trim at least $426 billion from Medicare, much of it from slashing the popular Medicare Advantage plan, which offers more benefits than traditional Medicare for seniors willing to pay higher premiums. Reimbursement rates for Medicare Advantage plans would be reduced by $117 billion over 10 years under the Baucus bill.
Karen Davenport, director of health care policy at the Center for American Progress, a liberal public policy research and advocacy group, disputed a claim by critics that the funding cuts would amount to a reduction in benefits for seniors.
“What it’s doing is trying to push change in the health care system so they are using Medicare as a lever for hospitals and doctors practices to help change the trajectory of health care costs,” she said.
The United States is in the midst of a horrible recession, most economists are predicting an extremely slow recovery maybe even a double dip recession. This is not the time to add new taxes and add to the financial burden of our Senior Citizens.