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HWR’s Cornucopia overflowed!

Two entries were inadvertently left out of last week’s Health Wonk Review – my apologies!

From Bill Danylik comes this report on a survey indicating perhaps half of large employers are going to be affected by the “Cadillac Tax by 2018.  Fine by me; the tax was part of the great compromise reached to fund ACA way back when.  It is intended to reduce the favorable tax treatment of benefits, one that subsidizes rich benefit plans.

Posting at the blog, Wendell Potter provides insight into why some states have experienced big increases in individual health insurance premiums.  Mr Potter thinks this is due to the similarity between the US health insurance business and the casino industry.

Hmmm, will Native Americans will come to rule health insurance soon?

OK, if you’re off today, enjoy.  If not, back to work!


3 thoughts on “HWR’s Cornucopia overflowed!”

  1. The Feds have envisioned two scenarios relative to the “Cadillac” tax –
    1) The employer will keep the current benefit design and cover the tax, or
    2) The employer will not cover the tax, but change the benefit design to steer clear of the tax, pass the extra cost onto the employees, and increase employee salaries to cover the difference.

    What about this scenario?
    3) Employers change the benefit design to steer clear of the tax, but employers don’t increase the salaries to cover the added expense.

    For employers who can’t afford the tax, the cost will shift direct to their employees, many of whom can’t afford it either. How’s that going to work?

    1. Bob – thanks for the comment. Perhaps there is a fourth alternative; employers continue to offer the richer benefits and some employees decide to continue to buy that plan. In this alternative, the employees deal with the change in the tax burden.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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