The Revenue Impact of the Baucus Plan
October 7, 2009
Download CBOJCT_on_Baucus_Plan
The Congressional Budget Office/Joint Tax Committee score of the Baucus health care plan is out. (CBO’s site is getting hefty traffic, so we’ve uploaded it here as well.)
SPENDING INCREASES & TAX CREDITS (over 10 years)
|
Additional outlays for Medicare and CHIP |
$345 billion |
|
Federal Subsidies for Insurance Purchases |
$461 billion |
|
Tax Credit for Employers Offering Health Insurance |
$23 billion |
|
TOTAL |
$829 billion |
REVENUE INCREASES (over 10 years)
|
Excise Tax on High-Premium Insurance Plans |
$201 billion |
|
Penalty Payments by Uninsured Individuals |
$4 billion |
|
Penalty Payments by Employers whose workers receive subsidies |
$23 billion |
|
Other |
$83 billion |
|
TOTAL |
$311 billion |
SPENDING REDUCTIONS (over 10 years)
|
Reductions in Medicare Payment Rates |
$162 billion |
|
Medicare Advantage Payments Set at Average Bid |
$117 billion |
|
Reductions in Medicare and Medicaid Hospital Payments |
$45 billion |
|
Other Program Savings |
$80 billion |
|
TOTAL |
$404 billion |
REVENUE INCREASES ELSEWHERE (over 10 years)
|
Other |
$196 billion |
NET CHANGE TO 10-YEAR DEFICIT: -$81 billion
As the non-economist, I should note that when Medicare was passed in 1965, it was estimated to to cost $3 billion in 1990, the equivalent of $12 billion after adjusting for inflation. The actual cost in 1990 was $98 billion. And my earlier blog post on the argument that entitlement programs paying for themselves is worth relinking to.
I’d also like to know what that “other” $196 billion in increased revenues are, since that’s the difference between this thing increasing the deficit or not.
Note: Corrected after posting to note that the plan is projected to reduce the deficit, not increase it.