The concept of so-called “Cadillac” health plans for consumers has been briefly introduced on this blog. Just as its title implies, higher than average premiums guarantee a certain level of care for the policyholder. The types of plans covered vary, and the coverage may apply to individuals or pooled, risk-stratified groups. Of course, premiums imposed by the latter are completely dependent on the health of that risk pool.

Among other things, the bill introduced by Dem Senator Max Baucus includes provisions for imposing a tax on premiums above a certain threshold for individuals and families. And although the “Cadillac” name may imply coverage for high wage earners, not everyone paying these premiums is especially well off financially. The tax on premiums is meant to affect the insurance companies; but many fear that the tax will be passed on to the healthcare consumer since the cost of healthcare delivery almost always rises faster than inflation. | LINK

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