Archive for Medicare
Health Insurance Plans To Cost More After Reform?
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Supporters of healthcare reform have claimed that increasing Americans’ access to health insurance plans will end up saving the nation money in the long run. Although they have acknowledged the need for nearly a trillion dollars in spending, most Democrats in Congress believe that it will result in savings due largely to an increase in preventative care that nips health problems in the bud, before they become more serious (and expensive). Initial estimates from the Congressional Budget Office appeared to bolster their surprising promises. However, those claims may have been too good to be true.
The Department of Health and Human Services recently released a report which states that when taking both public and private costs into account, the current healthcare reform proposals will cause spending on health insurance plans to rise over the next decade. Currently, medical spending makes up about 15% of the GDP: $2.5 trillion each year. Proponents of reform have promised that increased efficiency and the lack of a profit motive will drive health expenses down.
HHS investigators compared that promise to Medicare, the government-sponsored health insurance coverage for those over the age of 65. Among this nation’s health insurance plans, Medicare is the closest parallel to the proposed (but now on the back burner) public option. Although part of the cost of reform is set to be paid for through $493 billion in cuts and modifications to Medicare, the HHS has found that whenever Congress significantly reduces the program’s funding in one year, at least a portion of it is usually restored in the next budget. Therefore, they advise that such cuts are unsustainable.
Actuaries working in the HSS further warned that as it currently stands, healthcare reform has the potential to endanger Medicare. According to their report, cuts in service are quite likely. Republicans have ran with the findings, stating that they bolster their claims of the Democrat-led reform of slashing Medicare funding, while raising the premiums of health insurance plans. An already politically risky plan has the potential to collapse for Democrats after the release of this report.
Health Care Reform Contains Tax Increases Hidden In Plain Sight
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Image by craynol via Flickr
To pay for health care reform, you’ll find billions of dollars in tax increases tucked inside the two major bills now before Congress – with each taking a vastly different approach to who ends up paying.
Will it be the wealthiest among us, as proposed by the House bill, which levies a 5.4 percent income tax surcharge on those earning more than $500,000 a year?
Or might it be a broad swath of the middle class, hit by an array of tax code changes on medical expenses and taxes levied on insurance policies, drug manufacturers and others in the health industry, which say they’ll pass these costs on to consumers?
The final outcome may be parts of both approaches – but any way you cut it, someone will be paying higher taxes to support the costs of reform. Those costs include subsidies for some families to help them buy health insurance, starting in 2013 or 2014, and expanded government coverage for some.
Here’s a quick look at the tax proposals in each of the major bills: