Cadalic Plans under Health Care Refom

Cadillac insurance plan - Wikipedia, the free encyclopedia

en.wikipedia.org/wiki/Cadillac_insurance_plan‎

 

 

<sup>Informally, a Cadillac plan is any unusually expensive
health insurance plan, usually arising in discussions of medical-cost
control measures in the United States.[1][2][3][4] The term derives from
the Cadillac automobile, which has represented American luxury
since its introduction in 1902,[1]and as a health care metaphor dates
to the 1970s.[1] The term gained
popularity in the early 1990s during the debate over the
Clinton health care plan of 1993,[1] and was also widespread during
 debate over possible excise taxes on "Cadillac" plans during the
health care reforms proposed during the Obama administration.[1]
(Bills proposed by Clinton and Obama did not use the term
"Cadillac".)

The Patient Protection and Affordable Care Act
(as amended by the
Health Care and Education Reconciliation Act of 2010) imposes an
annual excise tax on plans with premiums exceeding $10,200 for
 individuals or $27,500 for a family (not including vision and dental
benefits) starting in 2018.[4]

Criticisms of these plans generally center on the small or
nonexistent co-pays, deductibles, or caps that encourage the
overuse of medical care, driving the cost up for the uninsured or
those on other plans, which some say necessitates a Cadillac tax.[citation needed]

A study published in Health Affairs in December 2009 found that
high-cost health plans do not provide unusually rich benefits to e
nrollees. The researchers found that only 3.7% of the variation in the
cost of family coverage in employer-sponsored health plans is
attributable to differences in the actuarial value of benefits.

Only 6.1% of the variation is attributable to the combination of
benefit design and plan type (e.g., PPO, HMO, etc.). The employer's
industry and regional variations in health care costs explain part of t
he variation, but most is unexplained. The researchers conclude
"…that analysts should not equate high-cost plans with Cadillac
plans, but that in fact other factors—industry and cost of medical
inputs—are as important in predicting whether a plan is a high-cost
plan. Without appropriate adjustments, a simple cap may exacerbate
rather than ameliorate current inequities."[5]</sup>