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Is this true?

My husband and I were talking about the health insurance reform thing that is going on right now. I know nothing is set in stone, but he said that if they pass it and are able to tax health insurance plans that they think are too good (I think they call them cadillac plans?), that we will have to pay a 40% tax on the amount of overage they determine constitutes a cadillac plan. Is that correct? He said that we might have to drop me from the coverage to avoid the taxation and get me on something different.
If this is true, why is the government penalizing those that have chosen to care for their families and do the responsible thing if they can so afford it?


Asked by Anonymous at 12:56 PM on Jan. 16, 2010 in Politics & Current Events

This question is closed.
Answers (13)
  • Wow, Special, I never thought about the teacher's union! I bet that does really piss off all the non-union workers.

    Taxing the Cadillac plans is supposedly a way to tax the rich. However, if you work as a minimum wage mail-clerk at a company with a Cadillac plan, it hurts you too. I'm betting most employers will cut back on health benefits in order to avoid the tax, thereby reducing the benefits for ALL employees, including the low-paid ones who can least afford the out-of-pocket expenses.

    Answer by mancosmomma at 1:43 PM on Jan. 16, 2010

  • It's not plans that are "too good," it is plans that are too expensive. And it's not 40%.

    Answer by stacymomof2 at 1:01 PM on Jan. 16, 2010

  • What is determined as "too expensive" and if it's not 40%, what is it? I need to start to see if it would make sense for me to get an individual plan.

    And another question since you seem to know something about it, what is the point of determining what is too expensive? Right now I have good coverage that we pay for. It just hurts the insured, not the insurance company. So I am the one the ends up paying, yet there was all of this talk about the insurance companies making too much money off of the consumer. How does this hurt the insurance companies at all? Or was it not supposed to in the first place? I really can't tell.


    Answer by Anonymous at 1:12 PM on Jan. 16, 2010

  • Yes, Op, that's true. Another one of Obama's brilliant moves. Ughh

    Answer by Anonymous at 1:13 PM on Jan. 16, 2010

  • It is 40%. If you are union, you get an exemption until 2018. If you're not, you have to start paying it immediately.
    Most likely, your employer will just quit offering the good plan and offer a reduced one that has less services or higher copays and deductibles so it falls under the cap for taxable plans.

    Answer by NotPanicking at 1:20 PM on Jan. 16, 2010

  • It effects plans valued at more than $24,000 and at last call it was 40%. If you are a UNION member you are exempt though.

    People are really squealing here. Our school district has a cadillac plan for its employees. The uproar is because the teachers won't pay the will be paid by the cooks, bus drivers, custodians, teachers aids, secretaries and such. Nice huh! Tax those that make the least amount of money.

    Oh and anyone that thinks the insurance companies won't pass this along to the customer....well you are just stupid.

    Answer by yourspecialkid at 1:22 PM on Jan. 16, 2010

  • What is determined as "too expensive" and if it's not 40%, what is it?
    The finance committee defines high-cost or "Cadillac" as any plan with premiums higher than $8,000 for individuals or $21,000 for families. Keep in mind that these figures include everything you and your employer spend on health care except for the deductible: premiums for medical (the portions paid by you and by your employer), dental, and vision coverage, as well as any money you put into a flexible spending account, which allows you to set aside pretax money to cover medical costs.

    If I have a "Cadillac plan," will I have to pay the proposed tax myself? No. The 40 percent tax will be charged directly to the insurer. That is, the insurance company has to pay 40 cents on every dollar spent above the $8,000 or $21,000 cutoff. Some portion of that tax, however, is likely to get passed onto the consumer.

    Answer by stacymomof2 at 1:46 PM on Jan. 16, 2010

  • stacymomof2

    Answer by stacymomof2 at 1:46 PM on Jan. 16, 2010

  • Well, for the next 5 years, if you are a member of a union or work for the fed. or local state governments, then you don't have to pay the tax. More vote buying/support. So, how will he make up the $20 billion dollars in revenue he lost by making this sweetheart deal? He is going to raise fees charged to seniors for Medicare, medical devices (pace makers, knee replacements, etc.) and fees for medicines to seniors. And the democrats ALWAYS ran campaigns with the fear moniker of the republicans will tax your benefits, ruin Medicare, raise prescription drug prices. I believe the democrats have trampled all over any increases the republicans ever did.


    Answer by jesse123456 at 2:07 PM on Jan. 16, 2010

  • Some portion of that tax, however, is likely to get passed onto the consumer.

    That's the point of it. The insurance companies are not going to eat this cost. The only thing is, "some portion" is awfully sugar coated.

    Answer by NotPanicking at 2:09 PM on Jan. 16, 2010