subject: Health Care Reform Bill 101: Who Will Pay For Reform? [print this page] The tea party movement has been all about bringing the true cost of the new health care reform to light, and informing people on who will really end up paying for the bill. As you may have guessed, this type of change certainly does not come without a hefty price. In fact, it is estimated that the cost of this plan will amount to about $940 billion in the first ten years alone. When you combine this figure with more than $40 billion in tax credits for small businesses, you have a major tab to cover.
So, the question that is on everybody's mind: where is the money going to come from? The short answer to this question is that the money will come from new taxes, fees on business, fees on health care, and cuts in spending for current government health programs such as Medicare.
One of the main areas to be taxed is the wealthy. Individuals earning more than $200,000 per year, or married couples earning more than $250,000 per year, will be paying more in Medicare taxes. This would increase the current tax rate from 0.9% to 2.35%. The new health care law also introduces an additional tax of 3.8% on dividends, interest, and the like as well.
There will also be a new tax placed on "expensive" health insurance. This tax, now referred to as the "Cadillac Tax", looks to impose a tax on insurers of health plans that are sponsored by employers and cost more than $10,200 per year for individual plans, or more than $27,500 per year for family plans. The tax would be approximately 40% of the cost of the plan after those dollar amounts have been met.
The tea party activists are also quite concerned with fees that are to be placed on health care industries. These fees would cause drug manufacturers to have to pay a total of $16 billion to the government by the year 2019. Health insurers would have to pay $47 billion by 2019, and medical device manufacturers would have to pay a 2.9% tax on the sale of the goods starting in 2013.
While small in comparison, indoor tanning services would be charged a 10% tax on all of their services through the year 2019.
Finally, the new health care bill would be at least partially paid by Medicare cuts. Payments made by the government to Medicare Advantage would be reduced by $132 billion over the next decade. Medicare would also reduce payments for home health care by $40 during the same time frame, and a reduction in payments to hospitals would retain an additional $22 billion by the year 2019.
