Susan Shargel, WIPP NP & President, Shargel & Co. Insurance Services Letter to David Leonhart of the New York Times

Dear Mr. Leonhardt,
 
I often read your column and find it worthwhile and informative. But today's column repeated and reinforced major misconceptions about so called Cadillac health plans. My hope is that you will do more research and correct the information provided. 
 
I have provided background information for other reporters including writers at the LA Times and your own paper (Reed Abelson). I would be very pleased to provide you with detailed and accurate information on all matters related to health insurance.
 
Here's the issue: 

Congress has chosen to define Cadillac health plans as those which cost over a certain amount per person or family.

An employee's definition of a Cadillac health plan is the benefits it provides, how much it costs the employee to access medical services, the maximum cost to the user for a serious health event or treatment of a chronic condition and, of course, the network of health care providers.

The cost of the very same health plan varies based on the claims experience of the group of people insured.  

I question your statement that one study after another has shown that workers with Cadillac plans are no healthier than workers with merely good insurance. I would fully expect that studies would show that the health of people in Cadillac plans, as defined by premium cost, is significantly worse than people in other plans! It costs more to pay the claims of people with health issues. High claims result in higher premiums.

I own an insurance brokerage in California. We specialize in providing benefits plans to small businesses.  California is in the forefront of small business health reform yet the pricing variation between businesses with the most favorable pricing and the highest pricing is 22% (10% plus or minus standard). The average variation in states which have implemented reforms is over 50% (25% plus or minus standard)! 

If we see a 40% excise tax required on "Cadillac" plans, we will force employers with high medical costs to degrade their benefits plans to bring the cost under the number Congress finally establishes.  Other companies, with healthier employees, will be able to continue to offer the very same benefits to their people.

Of course, age of employees, location of company, health care costs in the region, etc, etc, contribute to huge disparities and setting one premium amount for the whole country is absurd.

Again, I would be pleased to provide accurate information for you on health insurance issues.  I also invite you to read my blog - http://shargel.com/healthcarereformblog/

Sincerely,

Susan Shargel CLU CH

Shargel & Co Insurance Services
703 Market Street, Suite 901
San Francisco, CA 94103
415.543.8949 phone
415.543.9406 fax
www.shargel.com