Obamacare Is Forcing Cuts to High-End Health Plans, and Not Just For the Rich

[phantom power]

One provision of President Obama's historic healthcare law, dubbed the Cadillac Tax, penalizes companies that offer extremely generous healthcare plans to their employees. If an employer offers a plan that costs more than $10,200 for an individual or $27,500 for a family, the employer will be forced to pay a 40 percent tax on the portion of the plan cost that exceeds those thresholds. The idea, as the Times reports, is to "encourage employers to move away from plans that insulate workers from the cost of care and often lead to excessive procedures and tests, and galvanize employers to try to control ever-increasing medical costs."

In order to avoid the Cadillac tax, which goes into effect in 2018, employers are already searching for ways to scale back on costs, including cutting health benefits and increasing plan prices. (Employers are also amping up spending on preventive care services, which is a good thing.) And as Bradley Herring, a health economist at Johns Hopkins Bloomberg School of Public Health, told the Times, these health plan changes will likely affect a lot of people, not just the well-off; up to 75 percent of plans could be affected by the tax over the next ten years. "The reality is it is going to hit more and more people over time," he says.

One of those people affected is Abbey Bruce, a nursing assistant in Washington state whose employer increased the costs of the plan that she and her husband, who has cystic fibrosis, rely on. The Times tells her story:

Starting this year, they have a combined deductible of $2,300, compared with just $500 before. And while she was eligible for a $1,400 hospital contribution to a savings account linked to the plan, the couple is now responsible for $6,600 a year in medical expenses, in contrast to a $3,000 limit on medical bills and $2,000 limit on pharmacy costs last year. She has had to drop out of school and take on additional jobs to pay for her husband's medicine.

The number of employers adjusting their plans because of the Cadillac tax has increased from 11 percent in 2011 to 17 percent this year, the Times reports. And the amount that employer plans require workers to pay as a deductible—the amount an insured person has to pay out of pocket for healthcare costs before the insurer will pay—has jumped. The number of workers in plans with deductibles of at least $2,000 doubled between 2009 and 2012 to 14 percent.

http://www.motherjones.com/mojo/2013/05/obamacare-cadillac-tax-high-end-health-plan

[Tarheel_Dem]

1. I work in healthcare. If Abbey is a nursing assistant, won't she qualify for subsidies?

And I'm sorry, but the author should have included more than one anecdote to make her case. One can only assume that in this particular case, the husband is disabled, but she doesn't tell us that. Does he have an income? Lots of holes. I can't believe liberals are worried about somebody's "Cadillac Plan", when more than 45 mil people had no insurance at all. How quaint.

For a different perspective:

Obamacare Gets Some Good News From California

—By Kevin Drum

| Fri May. 24, 2013 7:56 AM PDT


A few days ago I mentioned some good news out of Oregon: competition among health insurers was forcing down the price of coverage on the state's new Obamacare exchanges. Yesterday we got more good news from a much bigger state: mine. Wonkbook has the deets:


In 2009, the Congressional Budget Office predicted that a medium-level "silver" plan — which covers 70 percent of a beneficiary's expected health costs — on the California health exchange would cost $5,200 annually. More recently, a report from the consulting firm Milliman predicted it would carry a $450 monthly premium. Yesterday, we got the real numbers. And they're lower than anyone thought.

As always, Sarah Kliff has the details. The California exchange will have 13 insurance options, and the heavy competition appears to be driving down prices. The most affordable silver-level plan is charging $276-a-month. The second-most affordable plan is charging $294. And all this is before subsidies. Someone making twice the poverty line, say, will only pay $104-a-month.



Sparer plans are even cheaper. A young person buying the cheapest "bronze"-level plan will pay $172 — and that, again, is before any subsidies.

http://www.motherjones.com/kevin-drum/2013/05/obamacare-gets-some-good-news-california

[zipplewrath]

2. This is actually old news

When ACA was in the final days, this whole thing had to be quickly sorted out because most/many union contracts had health care plans that were going to be considered "cadillac" plans. They put delays into the system so that Unions would have time to renegotiate their plans to avoid it. See, unions had been fore going pay increases for increased health benefits. So now they were going to have to negotiate higher pay, and less generous health benefits.

This aspect was one of the more regressive parts of the ACA. At first blush it sounded like some sort of "tax the rich" policy. But quickly the detailed studies showed that, far from only the rich, the middle class was going to get hit by this. But it appeals to the whole "market based approach" that Obama bought into, so along with alot of other GOP ideas, this one got stuck in.

[Tarheel_Dem]

3. All I hear is wwwaaaahhhh! We shouldn't have done anything on healthcare, if we couldn't have SP.

Same song, different day. Opponents, 30 years from now, will still be trying to kill ACA. It's the law, people will adapt, just as they did with Medicare.

[zipplewrath]

4. Don't think I've heard that

I heard something close with respect to the Public Option. And I don't think any of them are now working to "kill" the ACA. There are 3 schools on the left at this point.

1) Single payer still has to be passed because ACA didn't really fix anything
2) Get rid of the mandate. Install some sort of PO/Medicare buy in option and then you'll have a truly working system
3) It will naturally morph into something better so we should all just love it right now.

I'm somewhere between 1 and 2.