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Health Affairs, 29, no. 1 (2010):
174-181
(Published online 3 December 2009)
doi: 10.1377/hlthaff.2008.0430
© 2010 by Project HOPE
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Taxing Cadillac Health Plans May Produce Chevy Results
Jon Gabel1,*,
Jeremy Pickreign2,
Roland McDevitt3 and
Thomas Briggs4
1 Jon Gabel (Gabel-Jon{at}NORC.org) is a senior fellow at the National Opinion Research Center (NORC) in Bethesda, Maryland.
2 Jeremy Pickreign is a senior research scientist, Health Policy and Evaluation, for NORC, based in Albany, New York.
3 Roland McDevitt is director of health care research for Watson-Wyatt Worldwide, a benefit consulting firm in Arlington, Virginia.
4 Thomas Briggs was a research analyst, Health Policy and Evaluation, for NORC, based in Washington, D.C. He is now a senior analyst at the Association of State and Territorial Health Officials, in Arlington, Virginia.
It’s often assumed that high-cost health insurance plans—sometimes called "Cadillac" plans—provide rich benefits to plan subscribers. Health reform provisions that treat these plans like luxuries may be misguided. Only 3.7 percent of variation in the cost of family coverage can be explained by benefit design (actuarial value). Benefit design plus plan type (HMO, PPO, POS, or high-deductible plans) explains 6.1 percent of this variation. Industry type and medical costs in the region also play a role. Most variation in premiums, however, remains largely unexplained.
Key Words: Cost of Health Care • Health Economics • Health Reform • Employer-Based System • Insurance
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