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What Makes a Health Plan a ‘Cadillac’?

By Keith B. Richburg
Washington Post Staff Writer
Thursday, October 1, 2009

NEW YORK — In the scramble to find money to overhaul the health-care system, Senate Democrats have been eyeing the most generous insurance packages — what some call the “Cadillac” plans — as a lucrative target to tax.

But as the competing proposals are debated on Capitol Hill, a fundamental challenge has emerged: Few people agree on exactly what constitutes a Cadillac plan.

Many proponents of taxing high-end employer-based coverage have singled out the titans of Wall Street finance and industry, whose insurance might pay for regular EKGs, CAT scans and weekend health retreats at tony spas. The California Health and Longevity Institute, for example, offers “comprehensive physicals” over several days that include personalized counseling on wellness, fitness and nutrition.

But insurance plans that cover those types of things are rare. More common are the generous health benefits that many union workers receive — plans with high employer-paid premiums, low deductibles, prescription drug coverage, vision and dental care, and low or no co-payments.

Over the past decade or so, unions in contract negotiations typically chose to forgo large wage increases in exchange for more generous medical benefits, mainly because costs were rising faster than inflation. Now, as the Senate Finance Committee works on health-care legislation, union members say they feel unfairly targeted.

“It’s the old Washington, D.C., law of unintended consequences,” said Robert Laszewski, president of Health Policy and Strategy Associates, a consulting firm. “They went after the Goldman Sachs partner and they ended up with the fireman in Brooklyn.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/30/AR2009093004730.html?hpid%3Dtopnews&sub=AR

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October 1, 2009 - Posted by | Federal Government, healthcare | , ,

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