The Revenue Impact of the Baucus Plan October 7, 2009 Joseph Bishop-Henchman Joseph Bishop-Henchman 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. Stay informed on the tax policies impacting you. Subscribe to get insights from our trusted experts delivered straight to your inbox. Subscribe Share Tweet Share Email Topics
