CBO: Revised Senate Reform Bill Will Cost $23B More Than Previous Plan
The Congressional Budget Office (CBO), in its newest estimates on the Senate healthcare reform bill released on Saturday, said that gross cost would be roughly $23 billion higher ($871 billion) over the next 10 years with the new manager's amendments, compared to the $848 billion attached to the original bill presented last month.
The changes with the largest budgetary effects include:
- Replacing the insurance public plan option with "multi state plans" that would be offered under contract with the Office of Personnel Management.
- Expanding eligibility for a small business tax credit.
- Deleting provisions that would increase payment rates for physicians under Medicare.
- Increasing the payroll tax on higher income individuals and families.
Meanwhile, the payroll tax rate for individuals with income above $200,000 and for families with income above $250,000 was raised from 0.5% to 0.9%. This provision would account for a large proportion of the $26 billion increase in federal revenues over the next decade, CBO said.
Beginning in 2013, insurance policies with high total premiums would be subject to a 40% excise tax on the amount by which the premiums exceeded a specified threshold—set initially at $8,500 for single policies and $23,000 for family policies (with exceptions). The excise tax on these plans would generate about $35 billion in additional revenues in 2019, CBO said.
CBO projected a net cost of $614 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $871 billion in subsidies provided through the exchanges, increased net outlays for Medicaid and the Children's Health Insurance Program (CHIP), and tax credits for small employers. Those costs will be partly offset by $149 billion in revenues from the excise tax on high premium or "Cadillac" insurance plans and $108 billion in net savings from other sources.
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