Adam Solander Discusses the Cadillac Tax Cost Curve with RevCycle Intelligence

RevCycle Intelligence

Adam C. Solander, a Member of the Firm in the Health Care and Life Sciences practice, in the firm’s Washington, DC, office, was featured in RevCycle Intelligence, in “How to Sustainably Bend the Cadillac Tax Cost Curve.” The Q&A discusses how employers can prepare for the likely effects of the Affordable Care Act’s Cadillac Tax.

Following is an excerpt: How will this excise tax affect the health benefits plans for industries across the nation?

ACS: The Cadillac Tax will totally reshape how benefits are offered to employees. This is largely because of the way the Cadillac Tax thresholds are indexed for inflation.

The thresholds that trigger the tax are indexed based on the Consumer Price Index (CPI-U) and not medical inflation.

Because medical inflation far outpaces the CPI-U, the amount employers spend on healthcare will rise faster than the thresholds, eventually affecting every employer plan.

As a result, employers need to find strategies to bend the cost curve and stay under the thresholds while still providing a meaningful benefit to their employees.

As a result, we are seeing a trend toward more accountable payment models and more of a focus on population health and telehealth initiatives.