What You Need to Know
- The proposal would cut the 10-year cost of new social welfare programs to $1.75 trillion, from $3.5 trillion.
- Medicare could add hearing benefits, and Medicaid could get more home care funding.
- Insurers could face a 15% global minimum tax and a 1% tax on stock buybacks.
- High-income people could face extra income and net investment income taxes.
The administration of President Joe Biden has released a new Build Back Better Framework that might shape what kind of spending bills Democrats can actually get through Congress.
Officials have pulled provisions from the giant H.R. 5376 spending package to come up with a version that both progressive Democrats in the House and more centrist Democrats in the Senate, such as Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, can live with.
The White House says the new version could lead to $1.75 trillion in federal spending increases and tax cuts over the next 10 years. That compares with 10-year budget impact estimates of $3.5 trillion for H.R. 5376.
The government is on track to generate about $4.2 trillion in revenue this year, and about $55 trillion over 10 years.
What Your Peers Are Reading
Here are package provisions that could affect Americans’ insurance coverage and caregiving support:
Affordable Care Act premium tax credit subsidies: This provision would provide four years of expanded premium tax credit subsidies for people who earn too much to get Medicaid coverage but too little to qualify for ACA premium tax credit subsidies under current rules. (Cost: $130 billion over four years)
Medicare hearing benefits: This permanent provision would give people with traditional Medicare coverage help with paying for hearing exams and hearing aids. (Cost: $35 billion over 10 years)
Medicaid home care benefits: This permanent provision would provide extra support for Medicaid home care services and for adult daycare services and other community-based care services. ($150 billion over 10 years.)
Here are provisions that could affect insurance costs and income taxes for insurers and insurance customers:
Medicare drug rebates: The Tax Cuts and Jobs Act of 2017 calls for the Medicare program to change how it handles prescription drug discounts, or rebates. The Biden framework includes a permanent version of the H.R. 5376 provision that calls for Medicare managers not to implement the new Medicare drug rebate rules. (Revenue: $145 billion over 10 years)
Global minimum tax: This permanent provision, which is also in H.R. 5376, would set a corporate alternative minimum tax. It would require corporations with more than $1 billion in profits to pay a tax of at least 15% on their profits. (Revenue: $325 billion over 10 years)
Stock buyback tax: Shareholders and stock analysts now press insurers to buy back hundreds of millions of dollars of their stock every year. This framework provision, which is also in H.R. 5376, would set a 1% surcharge on corporate stock buybacks. (Revenue: $125 billion over 10 years)
High-income surtaxes: This provision would impose a 5% surtax on income above $10 million and an 8% surtax on income over $25 million. (Revenue: $230 billion over 10 years)