The American government hopes to end up saving almost as much as $100 billion in deficits because of the new health care reform bill. But, with the new Robin Hood approach that has been taken in the new health care reform bill, is this really going to be possible.

The huge tax increase that it is going to impose on almost everything will have to be borne by over half of the American population. The way the politicians who voted in favor of the bill project it is to be able to reduce the deficit budget big time. This will go on to bring an additional 32 million people under the purview of health insurance and through a spending of $940 billion more.

There will be a further fee raise on the drug companies. This way the government plans to generate further $27 billion. Who do you think is going to spend on these? The medical and pharmaceutical companies are certainly going to pass the buck on to the consumers. This is going to further increase the cost of the drugs for the consumers. There is also a purview of $20 billion that will be based on excise tax on makers and importers of medical devices. This will further increase the cost of these for the ultimate consumers.

The government expects to get more revenue out of insurance plans that will amount to almost $32 billion. But this will only come into effect somewhere down the line in the future.

The next most controversial of thing is the increase in Medicare tax and income tax on households that earn more than $200,000 per year. This will generate $210 billion for the government. The flip side to this is that the higher amount of spending and the additional tax rates that will come into effect will have lower amounts of money left for investment in businesses.

This will actually have a negative impact on the spending to create more jobs in the market. This will have a negative cyclical impact altogether.

The government plans to reduce the payment to physicians who have a tie up with this system by almost as much as 21%. This can grossly misfire as most physicians might opt to move out of the system. Further reduction in the costs of the physicians will bring about an extreme reduction in their earnings whereby the costs incurred will become more. This will result in the quality of Medicare rendered to the patients.

If an individual does not buy insurance for themselves issuing them a penalty is not going to work. The reason why they don’t have a medical insurance in the very first place is because they can’t afford one.

Therefore, this kind of imposed buying of the health care insurance as a mandatory process does not really hold well. The government foresees that at 2.5% of income this will bring them $17 billion over the next 10 years.
All of these reforms are supposed to trim the government spending, but how realistic are they for the common folks?