The Cadillac tax is on high cost policies, not on high benefit policies.

[hedgehog]

My current policy, which is an excellent group policy, would be unaffected. How ever, anyone holding a high cost, low benefit individual policy might be encouraged to look for a new policy in the exchange.....

[Sedona]

1. how do I find out...

how much my husband's employer is kicking in?


What's the threshold for a plan to be Cadillac?

[hedgehog]

2. The employer should be able to give you the info - someone down

at benefits knows. I don't know the final numbers on the cost limit. I just got ticked by an NPR story all about how small business owners might get hit by the Cadillac tax because they pay so much for policies for their employees. No one mentioned that the insurance exchange would be out there for them.

[karynnj]

10. They would be one of the main beneficiaries as they would be able to get large group rates

The problem now is that a small business where one employee has a major health emergency, there rates rise to an unaffordable level.

[amborin]

5. here is a study:

http://files.cwa-union.org/healthcarevoices/CWAExciseTaxReport.pdf

[karynnj]

9. Look at the assumptions

They assume that the cost of employer plans will increase by 5.5% a year. The fact is that companies themselves will not be able to afford that level of increase. It is unsustainable. Do you think the unions will be able for each of the next 9 years to get companies to pay 5.5% more for health insurance? But, that is what eventually puts so many people above the limit.

[amborin]

11. it's not the unions! It's EVERY middle class person! it's simply the unions have fought it

but this excise tax applies to EVERY person with that kind of "cadillac" plan

but as Robert Reich points out, they are really only chevy plans

you are not understanding the bill

[karynnj]

14. I do understand them and have likely read as much as you have on them

The fact is that, as written, they will hit less than 4% of plans in the beginning. Where there is a difference of opinion, it is because there is the assumption that NOTHING in the health care bill will change the growth rate in the premium increases. But, the exchange itself should have some impact - it caused a 6 % decrease in MA and this tax should have an impact. In addition, there is a bigger factor, there will be far fewer non-insured people - and the costs that hospitals incur is loaded on to those who do pay. Now, IF people like Reich are correct and the premiums continue to skyrocket - the biggest problem will not be the tax. The US already spends 17% of GDP on healthcare. Obviously if healthcare grows at double the other costs, it will quickly become an even bigger % of GDP and that is just not feasible.

It is not that I don't understand, it is that I disagree. There are experts on both sides - actually, there are more economists who consider this a good idea, than those who don't.

The fact is that even people working for some of the largest companies in the US have policies that are closer to the average cost of a premium which is around $16,000 for a family. This includes MANY middle class and even upper middle class people _ so CAPS or not, EVERY middle class person is NOT affected by this - not even every middle class person with employer paid insurance.

[amborin]

17. you've got it wrong

[karynnj]

20. The experts disagree on this - there are many economists who do not

reach the same conclusions. In fact, one clue is that many speak of this as one thing that will hold down premium costs. Have you ever worked on econometric modelling? The results depend on the assumptions.

[Telly Savalas]

3. Why wouldn't people flee high cost policies without the tax?

If people flee high cost policies, how will the tax generate any revenue?

[karynnj]

7. If this succeeds in keeping the premiums below this, the government

benefits by the fact that they have contained costs. In addition, if the companies pay less here, for the type of people who get these policies (ie people with leverage either because they are high level or union members, where the union negotiated it), they are likely to keep the wage/benefit package whole - meaning more income - which will be taxed.

[amborin]

13. the corporations benefit, not the taxpayers; your post is inaccurate

you keep saying these are union plans

they are not

they are the plans of many, many middle class people including union members

[karynnj]

15. At this point, fewer than 4% of plans are above the threshold

A very small % are union plans, some for union plans that will actually have a higher limit due to the fact that they are for risky jobs. The others are mostly for highly paid employees.

This affects ONLY employer paid plans. They are not plans that a high percent of middle class people have. Remember it affects only 4% of all plans. I have always been suspicious when people project out 9 years assuming parameters based on the current history when if this is enacted, it will be a huge game changer - one that should (and has to) change the growth rate of medical costs. A small change in that 5.5% that they assume, would have a drastic impact on their results. Now, a second implicit assumption is that IF these rates did happen, the threshold would not be changed.

In fact, the example of unintended consequences is the alternative minimum tax, but every year, the Congress votes in a fix so that it does not hit as many people.

[amborin]

16. wrong! try and get the facts

[karynnj]

19. I do have the facts - the fact is that there is a difference of

opinion on what happens to prices nine years out.

You can believe what you want, but it is certainly reasonable to question the assumptions behind projections. It is what mathematicians and economists do all the time.

[MadHound]

4. High benefit policies are usually high cost policies

And most union policies generally fall under that rubric. Just because you're not paying the high cost still doesn't mean that you won't be paying the tax, you will.

[karynnj]

8. "Most" union plans can't fall under that because there are too many

of them.

[amborin]

12. totally inaccurate

[karynnj]

18. Completely accurate in the first year of the plan

and for all years if the growth in healthcare costs can be constrained to slightly more than the total inflation rate.

You are looking at projections based on assuming a 5.5% increase in premium cost every year. Do you realize that this would make the $23,000 policy over $37,000, while they are assuming extremely low inflation. If the company is not in the healthcare industry, its revenues likely grew at closer to the overall rate of inflation. How do they afford that large of an increase in the wage/benefit package?

[karynnj]

6. I think the tax is only on employee paid planned, not individual plans

- and yes, there are many good programs, under the limit. The fact that less than 4% of plans are affected at most - and that was with the $21,000 threshold - shows that these are the most expensive plans.

It is clear the unions and the Republicans were able to distort who would be impacted and by how much.