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How the $938 Billion Health Care Bill is Financed

The Tax Foundation has the details on the financing for the recently passed health care bill (aka ObamaCare) that was passed late Sunday evening, March 21, 2010. According to a press release last week, they write:

“The $938 billion health care reform legislation finalized by Congress yesterday is financed primarily through net cuts to Medicare and an increased Medicare tax on high-income taxpayers . . . “

“The Medicare spending cuts would save $416.5 billion, or about 39 percent of the bill's 10-year cost. The increased Medicare taxes on high-income people -- including an additional 0.9% Medicare Hospital Insurance Tax on earned income exceeding $200,000 for single taxpayers ($250,000 for married couples) and an "Unearned Income Medicare Contribution" of 3.8% on investment income for taxpayers with adjusted gross incomes (AGI) in excess of $200,000 for single filers ($250,000 for married filers) -- would raise $210 billion, or about 19 percent of the legislation's cost.”

The graph below is from the Tax Foundation’s website. The remaining financing sources that comprise the $938 billion cost estimate scored by the Congressional Budget Office (CBO) are here. We will provide a separate post in a few days from citing others who think the CBO significantly understated the cost estimate.

 

Other Resources: A different view of health care financing can be found in this timeline (requires Adobe) showing when major provisions provisions; it is from Rep. David Camp (R-Michigan, Ways & Means Committee ranking member. Here is a nice list from Sweetness and Light, which shows how Virginia’s representatives voted. Here is the link to the Congressional Budget Office's cost estimate for the "final health care legislation."

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