• Paying for the Affordable Care Act

    It’s clear to everyone that the Affordable Care Act (ACA) is what we’re calling health reform now, right? Good.

    Anyway, Ezra Klein pointed readers to a handy pie chart from The Tax Foundation that shows where the money will come from to pay for ACA goodies. I agree with Klein that it would have been terrific if the creators had broken out the Medicare savings.


    Taking a peek at the CBO scoring document it looks like about 43% of the Medicare cuts are in reductions in updates to fee for service rates, mostly for hospital payments I believe. About 30% is cuts in Medicare Advantage payments. The rest is a grab bag of other stuff each piece of which is small.

    • Here is the breakdown according to the Tax Foundation;

      Main Components in Net Cuts to Medicare ($416.5 billion)

      Reductions in annual updates to Medicare FFS payment rates = $196 billion cut
      Medicare Advantage rates based upon fee-for-service rates = $136 billion cut
      Medicare Part D “donut hole” fix = $42.6 billion increase
      Payment Adjustments for Home Health Care = $39.7 billion cut
      Medicare Disproportionate Share Hospital (DSH) Payments = $22.1 billion cut
      Revision to the Medicare Improvement Fund = $20.7 billion cut
      Reducing Part D Premium Subsidy for High-Income Beneficiaries = $10.7 billion cut
      Interactions between Medicare programs = $29.1 billion cut

      Main Components in Other Provisions ($149 billion)

      Associated effects of coverage provisions on revenues = $46 billion
      Exclusion of unprocessed fuels from the cellulosic biofuel producer credit = $23.6 billion
      Require information reporting on payments to corporations = $17.1 billion
      Raise 7.5% AGI floor on medical expenses deduction to 10% = $15.2 billion
      Limitations to the use of HSAs, MSAs, FSAs, etc. = $19.4 billion

      Other Net Spending Cuts ($52 billion)

      Education reforms = $19 billion cut, which is the difference between approximately $58 billion in spending reductions via reform of the student loan program and approximately $39 billion in greater spending on higher education programs, most notably Pell Grants
      Community Living Assistance Services and Supports = $70 billion in cuts
      Category is netted lower by increases in other health programs such as public health programs and spending on community health centers

    • I think it is rather poor journalism to introduce a graph, show it, and do nothing to explain the implications.

      • @Harold H – That’s what links are for. Follow them. That’s how the blogosphere works. (We do this for free and you’re under no obligation to read our musings.)