Dartblog

I don’t know if Dartmouth’s health insurance plan meets the Cadillac test, but it has to come close. If it does, the Obama health care legislation would give the Administration a good excuse to cut College employees’ health benefits down to the level of plans typically possessed by mere mortals in the Upper Valley. From the NYT yesterday:

The other proposed changes for employer-provided coverage seem aimed mainly at workers whose benefits are either very generous or exceedingly skimpy.

On the generous end, about a fifth of employers now offer health plans that could be affected by a new 40 percent excise tax in the Senate bill on so-called Cadillac policies, according to an estimate by Mercer, a benefits consulting firm. That tax, to be imposed on annual premiums that exceeded $23,000 for family coverage, would go into effect in 2013. For example, if an insurer, or a self-insured employer, offers a plan costing $25,000, it must pay a 40 percent tax on the $2,000 that is above the threshold, or $800.

If the excise tax survives the House-Senate negotiations, it is hard to predict how employers will respond. But almost two-thirds of the employers Mercer recently surveyed said they were likely to reduce employee benefits rather than pay the tax.

“They’re going to work hard to find a way to keep the cost of their plans below the threshold,” said Beth Umland, Mercer’s director of health and benefits research.

She predicts that many of those companies will rely on what she described as “the tried-and-true method” — passing along more of the costs to employees, in the form of higher deductibles and co-payments, in order to reduce overall premiums.

Hmmm. Higher deductibles and co-pays? Why didn’t Dartblog think of that?