Exactly what is a"cadillac health plan"?

[hedgehog]

[baldguy]

1. Free oil change every 3000 mi?

[Mass]

2. Plans of more than $ 25,000 a year premium paid by companies typically to executives...

[DrToast]

7. Goldman Sachs pays $40,000 per year for executive health care plans!

[tritsofme]

10. I know plenty of people that have $2,000/month COBRA payments

Before the stimulus subsidy.

It is my understanding that COBRA payments reflect the full amount of the premium including the employer's portion.

So before folks like these were terminated, would that indicate they would have a plan falls into this "Cadillac" territory?

Sounds like this could effect a lot more people.

[karynnj]

18. I think when you are on COBRA you pay up to 1.02 times the cost to company

But even if it is simply the cost of the plan, this would be $24,000 a year - which is under even the bottom limit, $25,000, is anticipated. The other thing is that only the amount over that threshold is taxed. Therefore, assume that the limit is changed to $20,000 - then they would get $20,000 of compensation in the form of health insurance free and would pay an excise tax on the remaining $4000.

Consider that the people with the untaxed $12,000 or $16,000 plans pay more on copays, medicines and other charges - much of which is paid with income that was taxed than the people with the $24,000 programs. In essence, this is capping a tax deduction that has helped the more affluent more than those lower on the income scale.

There is some precedent to capping the amount of a benefit that can be given tax free. Every year, I still get a W2 from AT&T where I retired from in 1998 for something like $6 or $7. The reason is that I still get life insurance that was determined by the salary I had when I left - it is marginally above the amount that is tax free - so that amount is income I pay taxes on. I know AT&T is self insured on health care and I assume they might be on life insurance as well.

[rucky]

3. Small deductible. Hardly a copay. no questions asked.

Prescriptions covered. Dental, vision, prenatal & preventative care. Physical therapy, chiropractors, shrinks.

The only time I had a plan like this was when I was a checker at a (union) grocery store. My wife's entire pregnancy was complicated - three days in the hospital and an emergency c-section. Total bill: $5

[Avalux]

4. What members of Congress enjoy. n/t

[marybourg]

8. Not true. Congress gets what all federal employees get.. Certainly not

Cadillac. Toyota Corolla.

[NYC_SKP]

5. As a teacher, I had one in 2000: The "San Joaquin" Plan. Fully covered by the employer

The employer contribution under the arrangement with the union was MORE than the cost of the best plan.

No co-pay for meds or visits.

No deductable

Dental

Vision including annual exams, frames, lenses.

After a year or two, the San Joaquin plan was no longer offered and every year the choice of plans grew worse and more costly.

When I left the program, the cheapest Blue Cross plan was costing me $140/month beyond the employer contribution.

No dental.

Copays on everything.

$5000 deductible.

Teachers in my district actually had Cadillac Plans.

:shrug:

Edited for word choice.

[hedgehog]

6. I can see limiting coverage on whitening teeth and designer eye glass frames,

but otherwise I don't see this as being a cadillac.

The phrase sounds like divide and conquer, if you have such a plan you want to keep it, if you don't , you're supposed to be jealous.

[karynnj]

21. Exactly - and my guess is that it is the equivalent to all the garabge we heard that the estate tax

would make it impossible for people to keep the family farm they inherited. Except, no one could find anyone who was affected.

Here, there may be some people in the middle class, who will be slightly above the limit - but the tax starts AFTER the threshold. Even for them, the cost will be small. It is the executives with $40,000 plans who will pay more.

The intent is to get the union guys - even those who will not be affected - to think that they will be the ones paying more to insure the people with less money. I grew up outside a steel town in the 1950s and 1960s, this game is familiar. This is an attempt to foster class war fare between the lower and middle class - over a tax that will be mostly paid by the upper class.

[masuki bance]

9. Coverage that a GM autoworker receives. nt

[donheld]

11. If you have to ask you can't afford it.

[TheKentuckian]

12. Bullshit to raise the "terra level" ie If you have great coverage kiss it goodbye or prepared to get

reamed on TAXES.

The concept is toxic to what we are trying to do. We should be trying to make sure everyone in America has a "Cadillac in the driveway" rather than punishing people that get what everyone deserves and needs.

[quaker bill]

13. I would be happy to settle

for a hyundai in every driveway, if it got everyone where they needed to go.

[karynnj]

22. How wil you pay for $40,000 a person plans for everyone?

[endarkenment]

14. decent health care nt

[Orsino]

15. It's what all the TV opponents of health-care reform have. n/t

[ItNerd4life]

16. Hair replacment and other nonsense is covered.

Yep, there are many states that require things like hair replacement, pregnancy, psychological counseling, etc. to be covered by the healthcare plan. I only want a catastrophic health plan, but I can't get it. That is one of the problems with the national plan, it's only 1 plan 1 option. If there were different options and plans, it would sell much easier.

[karynnj]

17. It is a very expensive healthcare plan

They are referring to a plan Kerry proposed after the idea of taxing the wealthy was rejected. It is a variant of a plan proposed by Senator Bradley, a nice liberal Senator made in the 1990s.

Here is how the NYT' s defines it:

Goldman’s 400 or so managing directors and its top executive officers participate in the bank’s executive medical and dental program as part of their benefits, according to documents filed with the Securities and Exchange Commission. The program generally costs the bank $40,543 in premiums annually for each participant’s family.

Those taking part in the plan include the company’s chief executive, Lloyd C. Blankfein, and four other top officers, as well as managing directors, whose base salary is $600,000.

http://www.nytimes.com/2009/07/27/health/policy/27insure.html?_r=1

Here is a surprisingly accurate, easy to understand Washington Times article (trust me, I like Senator Kerry)
http://www.washingtontimes.com/news/2009/jul/29/tax-eyed-on-insurers-top-plans/

Now, here is a passive/aggressive Time magazine article, which is worth reading. It raises issues, until you think about the details.

The idea for an excise tax on insurers was put forth by Finance Committee member Senator John Kerry and modeled on a similar 1994 proposal from Senator Bill Bradley. President Obama has said as recently as July 22 that he's open to capping the tax benefit on health plans in some form.

It may seem like a neat solution to a thorny political problem, but as with every aspect of health reform, it's not nearly that simple. For starters, most large companies (1,000 employees or more) are self-insured, with a private health-insurance company merely acting as the benefits administrator. In these cases, Kerry's proposal would levy the excise tax directly on employers, whose extra cost burden could be (and many say most certainly would be) passed onto employees in the form of higher contributions to premiums, higher deductibles and higher co-pays. "It is not a tax on insurers," says James Klein, president of the American Benefits Council, which advocates for employer-provided benefits. "It is a tax on employers and, therefore, workers."

...

"If people think these Cadillac plans are primarily covering wealthy executives, they are mistaken," says Tom Billet, a senior health-benefits consultant for Watson Wyatt, a corporate consulting firm. In reality, many more of the most expensive employer-based health-insurance plans cover people like the families of New Hampshire state employees who, according to the Boston Globe, have policies worth $20,400 per year. (The employee contribution is $60 per month.)

...

Municipal unions, which in recent years have had more success winning premium health benefits than wage increases, are incensed at the notion that their members could get hit by a new health-insurance tax, even an indirect one. "In our judgment, we think it's inequitable to tax individuals because of who they work for, what they do or where they work," says Chuck Loveless, legislative director of the American Federation of State, County and Municipal Employees. Of the Kerry excise tax proposal, Loveless says, "We're looking at it very closely and we're trying to calculate the cost of excise tax on our plans, but I do know it's going to hit some union plans."

Despite whatever opposition new benefits-tax proposals might face, it's unlikely health-reform legislation will emerge without them.

http://www.time.com/time/politics/article/0,8599,1913147,00.html?iid=tsmodule

So, read quickly, I could believe that my former Senator, who I happily voted for and respected and the man, I most wanted to become President don't care about the unions - but TIME does. Well, that would have been mindboogling, until I looked closer and saw that this article is the 2009 equivalent to incredible concern the Republicans had for the poor people who could not keep the family farm they inherited because of the DEATH taxes.

So, here is what I posted in the JK group.

The limits where you start paying under what I have read of Kerry's proposal are between $25,000 to $40,000. It is also clear that the tax is applied only to the part above the threshold. Here, it is clear they worked to find a union plan that goes above the lowest limit they can find. Now look at their example - it is $20,400. It would be affected only if the threshold was moved down to $20,000.

Even then, they have a plan where the top $400 is taxed - and the recipients are getting $20,000 in compensation tax free, when the average breaks those of us lucky enough to have employer paid insurance get is closer to $12,000 - $$16,000. Not to mention, I am jealous that they pay only $60 a month. What this is is an attack on the plan by trying to make more people think it will hurt them.

They do not stop to consider that the people with the untaxed $12,000 or $16,000 plans pay more on copays, medicines and other charges - much of which is paid with income that was taxed. In essence, this is capping a tax deduction that has helped the more affluent more than those lower on the income scale. Bill Bradley, my former Senator, was a liberal, and a very good Senator.

This is the same strategy used on the estate tax where there were all these stories of how people would lose farms and small businesses in the family for decades. Yet, one politician -maybe Kerry, I am not sure - spoke of no one being able to find even one farm where this would have happened. Here, I am suspicious because the writer obviously looked for the highest cost of a union contract she could find and failed to find one. In addition, it is written so the range Kerry is speaking of was paragraphs away and written so one would think it would be affected - when it doesn't meet the lowest possible threshold. It also ignores the fact that the tax, I think, is just on the portion over the limit.

This is also not something completely outside the box. Every year, I still get a W2 from AT&T where I retired from in 1998 for something like $6 or $7. The reason is that I still get life insurance that was determined by the salary I had when I left - it is marginally above the amount that is tax free - so that amount is income I pay taxes on. I know AT&T is self insured on health care and I assume they might be on life insurance as well.

I think the concern about companies that self insure is silly as well. On the concern that they would pass the tax through to the recipient, I don't see why an employer who buys insurance that is taxed would not have a significant chunk of that tax passed to them meaning there is little difference. Elsewhere, there was a concern that if they were self insured there would be no "price tag" is not true. They have no trouble assigning a price for COBRA. (I paid the COBRA price for a daughter who took a year break from college, who had pre-existing conditions - so this was the best (though expensive - we were super happy when she went back to school) we could do to insure her. AT&T has good insurance, but the individual policy under COBRA was I think around $800 a month. Far below this threshold.

Now, where is the usual source of deceptive analysis from the right - aka lies - Heritage Foundation! I hate to link to RW sources, but Heritage garbage tends to become talking points - and here they are intentionally wrong.
http://www.heritage.org/Research/HealthCare/wm2561.cfm

They say that Kerry's plan will raise everyone's insurance because they ignore that he is not taxing the entire premium, but just the portion that is above some threshold. Their alternative - just to cap the amount that is taxfree would in fact do the same thing Kerry's proposal does, if you assume that the entire tax is paid by the policy holder.

They also very disingenuously say that it would apply just to private plans and not the public option. This is because they are again ignoring that Kerry's plan taxes only the amount above the average cost. The very design of the public plan means no public policies would be above the average cost. There is no intention of the public plan having gold plated options.

In addition, they do something more bizarre. Having incorrectly made Kerry's proposal apply to all private insurance plans, they then rewrite history and make the Republican plan only cap the amount of the deduction, rather than tax it all. So, apparently, it is Kerry and the Democrats who want to tax all the workers and middle class.

[southernyankeebelle]

19. What I think it is that millionaires can go to a high price doctor

and is able to get in to see him right away without waiting. Also the doctor will make house call. They get everything first class.

[Hell Hath No Fury]

20. What my mother had.

She worked for an employee benefits firm, and they got the best there was - no co-pays, no deductibles, alternative treatments such as acupunture, massage, and chiropractic, full dental, full vision, full prescription coverage.

Now that she is on Medicare, she still maintains part of her old coverage to cover the dental, eyes, and drugs.

[quiller4]

23. Plans costing $20,000 or more per year that have a low or no deductible

and low or no co-pays for medical care. They usually include full prescription coverage.