JCT: Baucus Bill To Cost Insureds, Insurers Billions

The AHFA bill draft would impose a 40% excise tax on individual health coverage with a value greater than $8,000 and family coverage with a value greater than $21,000 starting in 2013. The excise tax revenue would start at $9.5 billion in 2013 and total $201 billion from 2013 to 2019, the JCT analysts estimate.

The AHFA bill also would require health insurers to pay annual fees. The fee would start at $5.5 billion in 2010, increase to $6.1 billion per year in 2011, then hold steady at $6.1 billion per year. That provision could raise about $60 billion over the 10-year period analyzed, the JCT analysts say.

Other JCT analyst forecasts:

- Capping health flexible spending account contributions at $2,500 per year could raise $600 million in 2011, with revenue increasing to $1.9 billion in 2019, for a total of $15 billion in revenue raised from 2011 to 2019.

- Conforming “the definition of medical expenses for health flexible spending arrangements to the definition of the itemized deduction for medical expenses (excluding over-the-counter medicines prescribed by a physician)” would raise $5.4 billion from 2010 to 2019.

- Increasing the penalty for nonqualified health savings account distributions to 20% would raise $1.3 billion from 2013 to 2019.

– Capping the deductibility of health insurer compensation at $500,000 per year might raise about $100 million per year starting in 2013, and a total of $600 million from 2013 to 2019.