“Cadillac” plans: pretty much any health insurance plan that’s not provided by your friends in the welfare office, will soon be a thing of the past. This is what the regressives who pushed ObamKare wanted, of course – you can’t level up, but you can sure level down, so unless you’re a member of Congress, say hello to your new CVS staff nurse.
But what the designers may not have intended is the disassociation between employer and employee medical insurance, a link that, because of its tax-free treatment, has shielded consumers from much of the costs of health care. This new Cadillac tax is pushing employers towards a new system that will force employees to pay attention to what they’re paying for:
Another option that more employers are considering is moving toward a defined-benefit health plan, in which they give their employees a set amount of cash (below the Cadillac threshold), and allow them to choose and purchase insurance for themselves via private exchanges.
When something isn’t perceived as free, people don’t spend it as freely, and perhaps they’ll start performing cost comparisons and benefit analysis on their own. That will help hold down medical costs, presumably, but the end of premium insurance will certainly annoy everyone who presently has health insurance provided by his employer:
The upshot of such benefits is that employees can design and select their own plan options, but the overall value of their plans will still likely be less than their benefits they currently enjoy.
“It’s ironic because the point of the Affordable Care Act was to expand coverage to the 30 million people who don’t have it,” Watts says. “But a by product of that is that the employer-sponsored plans just aren’t going to be as good as they once were.”