New House Health Care Plan Funded By Income Surtax, Medicare Cuts

October 30, 2009

The $1.05 trillion House health care reform legislation unveiled by Speaker Nancy Pelosi yesterday is financed primarily through net cuts to Medicare (which would save $472.8 billion, or 39 percent of the bill’s 10-year cost), and a 5.4 percent surtax on high-income individuals (which would generate $460.5 billion, or 38 percent of the bill’s cost), according to a Tax Foundation review of the Congressional Budget Office’s (CBO) analysis.

By comparison, nearly half of the $829 billion Senate Finance Committee plan is financed through Medicare cuts ($377.8 billion, or 41 percent of the bill’s 10-year cost), and 22 percent would come from an excise tax on so-called “Cadillac” health insurance plans, which would raise an estimated $201.4 billion over 10 years. The House plan would reduce the deficit by $104 billion and the Senate version by $81 billion.

These charts can be downloaded here.

Read Tax Foundation Fiscal Fact No. 200, “Comparing Financing of the House and Senate Health Care Reform Plans.”

Was this page helpful to you?


Thank You!

The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?

Contribute to the Tax Foundation

Related Articles