Cadillac Tax Cuts Back High-End Healthcare

A recent article in the New York Times has bad news for the person who has everything: a good job, full health coverage, low monthly payment and copay.Seeking to bring greater transparency to the cost of healthcare, the Affordable Care Act includes a Cadillac Tax that penalizes employees who abuse their health insurance by overburdening the system with unnecessary treatments.  The tax was designed so employees would better see and feel the cost of care when making their own healthcare decisions.

This means many employees working for large corporations are going to be affected by the new healthcare law with many possibly losing this Cadillac Plan level of coverage.  Many employers are seeking out alternatives which would allow them to minimize the use of Cadillac Health Plans, like Mobile Health, which lets you talk to a doctor without the deductible or copay.

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Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past.

Get ready to enroll in a program to manage your diabetes. Or prepare for a health screening to determine your odds of developing a costly health condition.

Expect to have your blood pressure checked or a prescription filled at a clinic at your office, rather than by your private doctor.

Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.

While most of the attention on the Obama administration’s health care law has been on providing coverage to tens of millions of uninsured Americans by 2014, workers with employer-paid health insurance are also beginning to feel the effects. Companies hoping to avoid the tax are beginning to scale back the more generous health benefits they have traditionally offered and to look harder for ways to bring down the overall cost of care.

In a way, the changes are right in line with the administration’s plan: 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. But the tax remains one of the law’s most controversial provisions