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Friday, February 18, 2011

Health-Related Revenue Provisions in the Patient Protection and Affordable Care Act(PPACA)

Janemarie Mulvey
Specialist in Aging and Income Security

The Patient Protection and Affordable Care Act (PPACA; P.L. 111-148 as amended) will, among other things, raise revenues to pay for expanded health insurance coverage by imposing excise taxes and fees on industries in the health care sector, limiting tax-advantaged health accounts, increasing taxes on upper income households through the Medicare payroll tax and adding an additional tax on net investment income. The new law will also eliminate the tax deduction for expenses allocable to the Medicare Part D subsidy to employers.

In the 112
th Congress, the House passed H.R. 2, which would repeal PPACA. However, the Senate voted against an amendment to S. 223 to repeal PPACA. In addition, on January 20, 2011, the House passed H.Res. 9, which instructs the Ways and Means, Energy and Commerce, Judiciary, and Education and Workforce Committees to report legislation replacing aspects PPACA under their jurisdiction. In addition, several lawsuits have been filed that challenge the minimum essential coverage requirement on constitutional grounds. Most recently, on January 31, 2011, the district court in the case of Florida vs. Health and Human Services held that the minimum essential coverage requirement in PPACA is unconstitutional, and struck down the law in its entirety. Many expect that one or more of these cases will reach the Supreme Court.

This report summarizes the health-related revenue provisions in PPACA, their effective dates, and where data are available, potential impacts of these provisions.

Date of Report: February 10, 2011
Number of Pages: 14
Order Number: R41128
Price: $29.95

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