I’m confused by this trillion-dollar number that keeps getting thrown around to describe the cost of the health-care reform bills. Specifically, I don’t know what the flow of the money is.
Assuming it’s a trillion dollars, who is paying this money? From where? To what recipients is the money going, and for what products or services? It’s been said that the plan will pay for itself through cost savings, but how does that work, when the government isn’t getting into the actual health-care business? (Seems like improved efficiency in health-care delivery would only benefit hospitals, doctors, etc.) Or would the savings somehow reach the government secondarily?
How it will be paid for is still up in the air. The major ones on the table (which may very well be a combination of these things) are (from here where there is more detail):
Squeeze savings out of Medicare and Medicaid
Tax the wealthy
Tax employee health insurance benefits
Limit the itemized deductions of the wealthy
Impose or raise “sin” taxes
Penalize employers who don’t offer health insurance
Lower the insurance subsidy threshold
ETA: Worth noting the government is already in the health insurance business in a BIG way via Medicare/Medicaid and have been for 40 years.
The costs aren’t finalized yet because there are several different bills that need to be rolled into one. But the trillion would more or less half be paid by eliminating waste and insurance company subsidies. The remaining 500 billion over ten years would come to 50 billion a year. That money will likely be gained by taxation of those that make more than 250k a year. I don’t think they’ve decided the specifics of that yet.
As to what it’s paying for, it’s paying for subsidies that would allow the very poor to get health insurance coverage and infrastructure and incentives.
The government would benefit from higher efficiencies by lowering the cost of medicare and VA benefits and lowering the costs of the public option.