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Summary of Spending Decreases in Baucus Bill

1 min readBy: Gerald Prante

In addition to taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. hikes on various health care related activities, Sen. Baucus’s health care reform bill is largely financed by cuts to existing government health care programs. While the full list is exhaustive, here are the big three categories that are cut that contribute to the $404.1 billion savings that CBO projects over the next 10 years from this bill.

Ensuring Medicare Sustainability: $207.4 billion cut

Medicare Advantage: $114.2 billion cut

Improving Payment Accuracy: $58.4 billion cut

Note: Interactions within Medicare provisions offset the cuts above by about $14.6 billion

In summary, of the $829 billion gross cost of the Baucus bill over the next ten years plus the $81 billion in deficit reduction, here is how Sen. Baucus is paying for his health care plan (and the deficit reduction):

Net Cuts to Medicare = 377.8 (41.5%)
Net Cuts to Other Spending = 26.3 (2.9%)
Excise TaxAn excise tax is a tax imposed on a specific good or activity. Excise taxes are commonly levied on cigarettes, alcoholic beverages, soda, gasoline, insurance premiums, amusement activities, and betting, and typically make up a relatively small and volatile portion of state and local and, to a lesser extent, federal tax collections. on “Cadillac” Plans = 201.4 (22.1%)
Annual Fees on Companies within Health Care Sector = 121.2 (13.3%)
Other Tax/Revenue Increases = 184.8 (20.3%)

(Totals Do Not Add Due to Rounding)