Health Bill Cost Raises Questions On Reform

By: Michael Stevens
Staff Writer
Published: Mar 19, 2010

Democrats add insurance subsidies to Health bill cost to get more votes to pass reform. Lawmakers will vote on the measure Sunday.

Health bill cost and the constitution are the two things that Democrats and Republicans will argue. Democrats added billions for insurance health reform subsidies for consumers and added a $250 rebate for seniors. It is one of the last minute sweeteners to bring the $940 billion health legislation into law.

"It will make history and we will make progress by passing this legislation," House Speaker Nancy Pelosi said in a statement.

Beginning in 2014, most Americans would be required for the first time to purchase health insurance, and face penalties if they refused. Millions of families with incomes up to $88,000 a year would receive government help to defray their costs. Large businesses would face fines if they did not offer good-quality health coverage to their workers.

Republicans attacked the measure relentlessly as a government takeover of the health care industry. The claim that it is financed by higher Medicare cuts and tax increases. There is also a new Medicare payroll tax on upper income wage earners.

"The American people are saying, 'Stop' and they're screaming at the top of their lungs," House GOP Leader John Boehner said in a statement. "I'm sorry, Mr. President, this isn't about you."

Democrats and Republicans will vote on health care this Sunday. Pelosi and others expressed confidence about the outcome. Obama's decision to put off a scheduled Asian trip until later in the year was a confession that the votes were not yet secured.

The Price To Pay For Government Insurance

Seniors who experience a gap in health coverage in the Medicare prescription drug program would receive a $250 rebate this year. Beginning in 2011, pharmaceutical industry discounts would cover 50 percent of the price of drugs that seniors buy once they enter the gap in health coverage. That share would rise to 75 percent over a decade.

Medicare recipients generally pay 25 percent of their costs and the health program picks up the rest. To help pay the cost of increased benefits, the legislation would increase Medicare payroll tax 0.9 percentage point, to 2.35 percent, on wages above $200,000 for individuals and $250,000 for married couples filing jointly. In 2013, a new 3.8 percent tax would be imposed on interest, dividends, capital gains and other investment income.

The health measure also erased a Senate-passed provision to give Nebraska a greater share of Medicaid funds than other states. Republicans had called it a Cornhusker Kickback. Democrats and Obama sought to focus public attention on the deficit reduction.

The Congressional Budget office put the 10-year savings at $138 billion. However, Democratic leaders said that would be dwarfed by a projected $1.2 trillion in the following decade. Republicans countered quickly, pointing out that the health revisions raised the levels of planned Medicare cuts and would mean higher taxes.

"The Senate bill that Speaker Pelosi said Democrats are so afraid to take a vote on cut Medicare by $465 billion. This latest bill increases those cuts by about $60 billion more," Senate Republican leader Mitch McConnell said. "How about taxes? The Senate bill that Democrats are so afraid to take a vote on raises taxes by $494 billion. This bill increases those tax hikes by at least $150 billion."