The “Cadillac tax” on high-priced employer plans, which goes into effect in 2017, should help keep premium growth down. Say what⁉️

This is an excerpt from an article on Fiercehealthpayer.com I find these kinds of statements and assumptions amusing.

Not all the news is bad, however. The average rate of increase for both premiums and deductibles has decreased since the Affordable Care Act went into effect in 2010, according to the research summary. Deductibles went up more than 10 percent per year from 2003 to 2010 but only went up 7.5 percent after that, while the rate of increase for premiums dropped from 5.1 percent in 2003-2010 to 4.1 percent in 2010-2013.

The “Cadillac tax” on high-priced employer plans, which goes into effect in 2017, should help keep premium growth down. That said, it’s too soon to tell if the historically low growth rate in healthcare spending will continue, according to the research, especially if the larger economic recovery also continues in stride.

Obamacare has little if anything to do with lower premiums and deductibles; just look at the timeframes that are regularly cited.

The so-called Cadillac tax has nothing to do with premium growth. It has everything to do with the growing burden of out-of-pocket costs on average families. Employers, both public and private, would be foolish to pay this tax on high cost health plans. What they will and have been doing is simply lower the value of coverage to lower cost (but not the growth rate) and shift that burden to plan participants. So, if you measure spending based on what is paid by health benefit plans, it will appear spending is lower. If you measure it including what is paid by individuals and their plans; well that’s quite a different result.

The greatest impact will be on public employee plans, multi-employer Union plans (though they have some relief from the law) and very large employer plans all which historically have been the most generous. Employers have been making adjustments to avoid this tax for several years.

For public employee plans, taxpayers will likely pay the new tax, for others the actual burden will be on workers in way or the other.