Obamacare Is A Train Wreck, If By Train Wreck You Mean Working Better Than Expected, Pt. 3

by evanmcmurry

Obamacare The Affordable Care Act has already begun making health care more affordable in states that have chosen to set up their own exchanges. Now it’s reducing costs via a tax on so-called Cadillac plans:

Proponents of the law say the Cadillac tax is helping bring down costs by making employers pay attention to what their health care costs are likely to be in the long run. “It’s really one of the most significant provisions” in the Affordable Care Act, said Jonathan Gruber, the M.I.T. economist who played an influential role in shaping the law. “It’s focusing employers on cost control, not slashing,” he said.

[snip] The percentage of employers revising their plans as a result of the tax has increased to 17 percent this year from 11 percent in 2011, according to a survey of United States companies released this month by the International Foundation of Employee Benefit Plans.

Although the tax does not start until 2018, employers say they have to start now to meet the deadline and they are doing whatever they can to bring down the cost of their plans.

One of the explicit goals of the ACA was to rein in health care costs. While taxing Cadillac plans will result in higher deductibles for fewer benefits, the overall cost of health care will be reduced at the same time: if fancier plans don’t cover every test and procedure under the sun, all arms of the health care industry will focus care. You’ll pay more out of pocket, but health care in general will become less of a catastrophic proposition, both on the individual and societal level.

This is also causing companies to look at ways to keep employees healthier:

Larger companies are also trying a variety of initiatives to improve the health of their workers — experimenting with an array of disease management and wellness programs, for instance, or even setting up their own work-site clinics as a way to sidestep the tax.

So: lower costs and healthier people, in exchange for paying more out of pocket.

More in the series:

Obamacare Is A Train Wreck, If By Train Wreck You Mean Working Better Than Expected, Pt. 2

Obamacare Is A Train Wreck, If By Train Wreck You Mean Working Better Than Expected, Pt. 1

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