Posts Tagged - ‘Congressional Budget Office’

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How Much Does Healthcare Reform Cost?

Wednesday, May 12th, 2010

Image: Jake Wasadin under CC 3.0

Bad news for health insurance reform: the newest cost figures predict that it will cost the government an extra $115 billion in health care costs over the next decade.

The Congressional Budget Office says that if Congress approves all of the spending asked for in the bill, the total cost of the legislation will surpass $1 trillion.

Where are these expenses coming from?

  • $34 billion in funding for community health centers
  • $39 billion for the Indian Health Service, which provides care to Native Americans
  • $10-20 billion in federal administrative costs

Although it clearly makes the affordable health insurance law less affordable, these costs weren’t included in the initial estimates because they are not mandatory; instead, they are authorizations for discretionary spending. Since Democrats lack a filibuster-proof majority, they may not pass.

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How Will They Pay For Health Insurance Reform?

Monday, March 22nd, 2010

(Image: AMagill under CC 3.0)

One of the primary issues surrounding healthcare reform is its cost. Now that the legislation has passed, what will the federal government spend on remaking America’s health insurance system?

According to the nonpartisan Congressional Budget Office, the bill will cost $940 billion over the next decade. That is reduced from earlier estimates of past versions’ expenses.

How will they get this money? Although the CBO predicts that affordable health insurance reform will lead to cost savings in the long run, the government will definitely add to the federal deficit in the short term. In addition, they are finding various sources of money, including:

  • Tax increases, including $400 billion in taxes on wealthy individuals and families. Most of it comes from an increased Medicare payroll tax on wages and investment income over $200,000 or $250,000, respectively.
  • Spending cuts, such as $500 billion in Medicare Advantage payments (privately administered Medicare supplements)
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Health Bill will Pay for Itself?

Friday, March 19th, 2010

(Image: Zef Delgadillo under CC 3.0)

Democrats are elated about the financial report released by the Congressional Budget Office. It estimated the health bill would reduce projected federal budget deficits by $138 billion over the next decade, with additional tax revenue and Medicare savings.

The report is already helping move the legislation forward. Representative Bart Gordon and Representative Betsy Markey had a change of heart on the healthcare bill. Both Democrats cited the budget report as the deciding factor. Many Senators had expressed concern about the cost of the health bill and were convinced the country just couldn’t afford it.

White House officials are now touting the budget report which they say proves the health care plan will not only save lives, but will also pay for itself in the long run.

The federal government would spend $940 billion over the next 10 years to provide medical coverage to 32 million people who would otherwise be uninsured. More low income individuals will be covered and other families will receive subsidies on behalf of the government to purchase health insurance.

President Obama still needs the support of about six more Democrats to reach the 216 votes needed to pass the affordable health insurance bill. Senators are slated to vote on the health bill this weekend.

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