Data on Health Insurance Detailed by Researchers at University of Minnesota (A KINKED HEALTH INSURANCE MARKET: Employer-Sponsored Insurance under the…

Managed Care Weekly Digest

Data on Health Insurance Detailed by Researchers at University of Minnesota (A KINKED HEALTH INSURANCE MARKET: Employer-Sponsored Insurance under the Cadillac Tax)

By a News Reporter-Staff News Editor at Managed Care Weekly Digest -- Investigators publish new report on Health Insurance. According to news reporting originating in Minneapolis, Minnesota, by NewsRx journalists, research stated, "The Affordable Care Act imposes a 40 percent excise tax on high-cost 'Cadillac' health insurance plans in excess of defined thresholds beginning in 2020. Using economic theory and a microsimulation model, we predict how employers will respond to the Cadillac tax by adjusting wages and health insurance benefits."

Financial support for this research came from Blue Cross and Blue Shield Professorship at the University of Minnesota (see also Health Insurance).

The news reporters obtained a quote from the research from the University of Minnesota, "In its first year, 13.34 percent of individual and 16.73 percent of family employer-sponsored health insurance plan holders will be affected by the Cadillac tax; these percentages will increase to 35.33 and 42.01 percent, respectively, by 2025. Over 99 percent of those affected will reduce their health insurance benefits to the thresholds. Effectively, the Cadillac tax will impose a hard cap on health insurance benefits, causing a clustering of benefits at the thresholds and a sharp reduction in the variance of benefits. Revenue from the Cadillac tax through 2025 will total $204 billion, all but $42 million of which will stem from 'indirect' revenues-health insurance benefits shifted into taxable wages. This shift will increase wage growth and decrease benefit growth for those affected by the Cadillac tax."

According to the news reporters, the research concluded: "We simulate a cap on the tax exclusion of employer-sponsored insurance premiums and conduct sensitivity analyses with linear regression metamodeling."

For more information on this research see: A KINKED HEALTH INSURANCE MARKET: Employer-Sponsored Insurance under the Cadillac Tax. American Journal of HEALTH Economics, 2017;3(4):455-476. American Journal of HEALTH Economics can be contacted at: Mit Press, One Rogers St, Cambridge, MA 02142-1209, USA.

Our news correspondents report that additional information may be obtained by contacting C. Drake, University of Minnesota, Div Hlth Policy & Management, Minneapolis, MN 55455, United States. Additional authors for this research include L. Higuera, F. Alarid-Escudero and R. Feldman.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1162/ajhe_a_00084. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Keywords for this news article include: Minneapolis, Minnesota, United States, North and Central America, Health Insurance, University of Minnesota.