To date, the exact plan to pay for the new Health Care Reform is unclear. While it’s slated to be a shared cost between consumers, providers and government, it is not defined as of yet. Benefits to many people will be available while reducing costs to others currently paying high deductibles and premiums for health care.
Currently, government employees do not pay medicare taxes on their income. One option that is being considered is to begin taxing government employees the 2.9% that workers other than government employees are required to pay. Doing so will increase the funding to government, but raises the question of how much Medicare taxes are going to be used to pay for Health Care Reform when Medicare is already running into issues of lack of funding.
Medicare coverages will be somewhat better under the Health Care Reform, with the so-called doughnut hole costs to seniors being reduced and eventually eliminated. There is no definite time line as of yet for the disappearance of the doughnut hole costs, however there are plans to provide rebates to those already paying the gap between Medicare coverage and the Catastrophic Coverage that eventually picks up the costs.
Many questions arise when discussing this plan because President Obama has already stated that at the very worst, this plan should have a neutral effect on the current deficit. It is not to increase the current deficit in any way. Many options are being looked at, including putting more funding towards locating fraudulent payments under the Medicare and Medicaid plans to decrease the amount of spending and increase funding available to the Health Care Reform plan. However, currently, the question of will money be taken from Medicare for the Health Care Reform cannot be answered.