Taxing Cadillac health plans may produce chevy results

Health Affairs

Volumn 29, Issue 1, 2010, Pages 174-181

  Gabel, Jon ^a   Pickreign, Jeremy ^b   McDevitt, Roland ^c   Briggs, Thomas ^d,e  

^a National Opinion Research Center   (United States)

^b NORC   (United States)

^c Watson Wyatt Worldwide ^*  (United States)

^d NORC   (United States)

^e ASSOCIATION OF STATE AND TERRITORIAL HEALTH OFFICIALS   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; FAMILY; HEALTH CARE COST; HEALTH CARE PLANNING; HEALTH CARE POLICY; HEALTH INSURANCE; HEALTH MAINTENANCE ORGANIZATION; INDUSTRY; MEDICAL CARE; MULTIVARIATE ANALYSIS; REIMBURSEMENT; SENSITIVITY ANALYSIS;

COMPETITIVE MEDICAL PLANS; COST-BENEFIT ANALYSIS; HUMANS; INSURANCE, HEALTH; TAXES; UNITED STATES;

EID: 77957329675     PISSN: 02782715     EISSN: 15445208     Source Type: Journal    
DOI: 10.1377/hlthaff.2008.0430     Document Type: Article

References (17)

1. Feldstein MS. The welfare loss of excess health insurance. J Polit Econ. 1973;81(2):251-80.
2. Staff of the Joint Committee on Taxation. Background materials for Senate Committee on Finance roundtable on health care financing, presented before the Senate Committee on Finance. 2009 May 12; p. 5.
3. Chollet D. Crafting a viable health insurance system. Health Aff (Millwood). 1991;10(2):224-8.
4. See Claxton G, Gabel J, Di Julio B, Pickreign J, Whitmore H, Finder B, et al. Health benefits in 2007: premium increases fall to an eight-year low, while offer rates and enrollment remain stable. Health Aff (Millwood). 2007;26(5):1407-16.
5. In 2007 premiums increased 6.1 percent, and in 2008 the Kaiser Family Foundation changed the method for calculating premium increases.
6. Most large employers have many tiers of family coverage such as single plus one adult, single plus one child, two adults and a child, family of four, and other classifications.
7. Actuarial value is the percentage of the bill paid by insurance for a large standardized population.
8. Readers interested in a fuller description of the method for calculating actuarial value should refer to McDevitt R, Gabel J, Gandolfo L, Lore R, Pickreign J. Financial protection afforded by employersponsored health insurance: current plan designs and high deductible health plans. Med Care Res Rev. 2007. 64 (2):212-28.
9. The Medicare Payment Advisory Commission has constructed the geographic practice cost index to adjust payments to physicians for the Medicare fee schedule in eightynine payment areas. One component measures incomes of college graduates in the area; another component measures practice expenses for physician practices in the area, and a third component measures professional liability costs. Medicare Payment Advisory Commission. Geographic practice cost indexes [Internet]. Washington (DC) : MedPAC; updated 2003 Aug. 12 [cited 2007 Oct. 4];[about 2 p]. Available from: http://www.medpac.gov/publications/other- reports/Aug03-GPCI-2pgrKH.pdf
10. The Technical Appendix is online at http://content.healthaffairs.org/cgi/ content/full/hlthaff.2008.0430/DC1
11. We opted for the single-site, single plan sample because of the conceptual advantages discussed previously. In addition, in regressions with the full sample, dummy variables for single-site and single-plan firms were statistically insignificant.
12. High-deductible plans with savings option include employer contributions to the savings accounts in the family premium figure.
13. In the full sample of 2, 654 plans, differences were statistically significant between plans over and under the cap for these variables: (1) PPO membership; (2) size of copayment for office visit; (3) size of copayment for nonpreferred drugs; and (4) the presence of an out-of-pocket limit. We believe that the smaller sample size is responsible for the differences in statistical significance from the single-site, single-plan firms and the full sample.
14. The 0.49 statistic is a point elasticity figure calculated at the mean.
15. For examples, see Wennberg J, Fisher ES, Skinner JS. Geography and the debate over Medicare reform. Health Aff (Millwood). 2002; 21: w96-114.
16. The correlation between the geographic practice cost index and the Dartmouth Atlas reimbursement index was 51 percent and significant. We checked for high multicollinearity for both indices by determining the tolerance for each variable relative to all other variables in our equations. Both variables do not meet the common rule of thumb for high multicollinearity.
17. Schmid SG. Geographic variation in medical costs: evidence from HMOs. Health Aff (Millwood). 1995;14(1):271-5.