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Cadillac health insurance - What is it all about?

Posted on: 21st Jan, 2010 03:39 am
The Cadillac health insurance plan is a high-cost policy which is defined by the total cost of premiums, and not by what it covers or how much you've to pay for a doctor or a hospital visit. Those who have Cadillac plans usually have low deductibles and exceptional benefits which covers all the major treatments in most cases. This is an employer based plan.

So, why are insurance premiums high?
Cadillac health insurance premiums are high due to various reasons. Some of these include:
  • Age of the person
  • Gender
  • Health status of the person
  • Person living in a region with high health costs
Who opts for this high cost insurance plan?
It is generally believed that the Cadillac coverage mainly caters to the Wall Street titans. The annual premiums are approximately $40,000. However, it should be noted that not everyone opting for this high cost insurance plan is wealthy. There are various union workers and employees of businesses who opt for this plan as they are older or sicker.

As per the health bill passed by the Senate, a plan costing around $8,500 for an individual or $23,000 for a family is termed as a "high premium health plan".
Hi Sara,

The health-care bill passed by the Senate would impose a 40% excise tax on insurance at or above $23k annually in 2013. The tax will be paid by the insurers, but in reality its costs will have to borne by corporations and workers who purchase such high-cost insurance policies.

Many have welcomed this move as they think it will put a stop on excess spending on heath care. Under the US tax code, workers are required to pay taxes on wages received, but the health insurance benefits they receive are not taxed. Thus, people who do not get health insurance benefits from employers have to subsidize those who are insured at their work. The tax will also help the Govt. to bear the burden of the health reform, which is supposed to cost about $150 billion from 2013 to 2019.

Thanks,

Jerry.
Posted on: 12th Feb, 2010 01:08 am
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