November 2, 2009
Tax Foundation Manager of Media Relations Natasha Altamirano Highlights Tax Foundation Analysis of Health Care Reform Financing on The Hill’s Congress Blog
"Health care reform plans funded by new major tax, Medicare spending cuts"
By Natasha Altamirano
The two major health care reform proposals to emerge from Capitol Hill in recent weeks have similarities and major differences.
Both the House compromise unveiled by Speaker Nancy Pelosi last week and the version recently approved by the Senate Finance Committee rely on Medicare spending cuts, although the House plan would cut nearly $100 billion more, and both plans include one large new tax - a high-income surtax in the House version and a tax on high-value health insurance plans in the Senate version.
The $1.05 trillion House health care reform legislation includes 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 the nonpartisan Tax Foundation's 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.
