Cadillac tax will affect one in ten US single employer plans in 2018, more in CSG-ERC region

Under the Affordable Care Act, in 2018 high cost employer-sponsored health plans will begin paying a hefty 40% tax, termed the Cadillac tax, on the value of the plan over specified threshold levels. A new report by the Congressional Budget Office estimates that 10.2% of US single premium plans and 6.0% of family plans will exceed the threshold and trigger the tax. Most CSG/ERC states are expected to exceed the national rates. In the region, MA and CT single and family plans, respectively, are most likely to trigger the tax in 2018, while PA and RI plans are least likely. The 2018 threshold levels will be $10,200 for single premiums and $27,500 for family plans, with modifications for some groups. As the threshold levels for the tax will rise every year linked to the rate of general inflation, experts expect the percentage of plans subject to double or triple by 2028. Proponents of the tax argue that it serves as a powerful incentive to control health costs, but opponents feel it is unfair to groups with high cost workers or those who negotiated their compensation to favor health benefits. Congress is considering proposals to repeal the tax.

Employer plans expected to exceed tax threshold, 2018
Single Family
CT 13.6 11.9
DE 14.8 7.6
ME 10.0 5.5
MD 11.5 8.7
MA 15.8 8.2
NH 12.0 6.1
NJ 14.0 9.7
NY 13.8 8.2
PA 9.3 4.5
RI 9.9 3.6
VT 11.4 5.8
US 10.2 6.0

CSG ERC health panel focuses on innovations

Today’s Health Policy panel at CSG/ERC’s Annual Meeting focused on health care innovations that build value and building a workforce to support that transformation. Pam Price, former Delaware House staff, expertly moderated the breakfast session.


We heard from Heidi Louise Behforouz, MD of AnansiHealth and Brigham and Women’s Hospital about the value of including community health workers into the health team. CHWs represent a move back to a community-based model of health that recognizes the importance of helping people care for themselves in their daily lives. One study found that for every dollar spent on CHWs, three dollars were saved across the health system.


We also heard from Jeff Brown of NJ’s Quality Improvement Collaborative about that state’s plan to move Medicaid members into Accountable Care Organizations, by improving access to quality care and using the resulting savings to improve community health.


We heard from Kerri McGowan Lowrey, J.D., M.P.H. of the Network for Public Health Law — Eastern Region about the rich resources and technical assistance their project provides to Eastern Region policymakers seeking help with public health law and analysis.


Finally we heard from Secretary Rita Landgraf of Delaware’s Department of Health and Social Services about innovations in their state. As with ten other ERC states, DE has been awarded a State Innovation Model grant from CMMI. But understanding that all stakeholders need to be engaged and involved for successful reform, DE has chosen to create a nonprofit to shepherd patient-centered reform in their state. For the effort, DE has devoted $100 million in state funds to supplement $30 million in federal funding.

ERC states’ Medicare hospital readmission rates vary

According to Kaiser Health News, two thirds of hospitals in the CSG/ERC region will face Medicare penalties because of high readmission rates. This is the fourth year for the program that penalizes hospitals for the percent of Medicare patients with certain conditions who return to the hospital within 30 days. This year’s penalties will begin October 1st. Nationally 54% of hospitals will be penalized this year, down slightly from last year. New Jersey and Connecticut have the highest rates of hospitals facing penalties in the nation, but Maryland is the only state that will have no hospitals penalized this year because of a unique Medicare payment arrangement. Penalties to hospitals in the CSG/ERC region average 12% below the national average. Other quality-based Medicare hospital bonuses and penalties will also begin in October.

State Name Number of Penalized Hospitals Percent of All Hospitals Penalized Average Hospital Penalty (Percent)
Connecticut 28 90 0.66
Delaware 5 71 0.35
Maine 11 31 0.4
Massachusetts 51 78 0.7
New Hampshire 11 42 0.45
New Jersey 63 97 0.73
New York 140 77 0.75
Pennsylvania 128 74 0.61
Rhode Island 9 75 0.63
Vermont 4 27 0.08
ERC average 66.2 0.536
National 54 0.61

New Gallup survey finds ERC region uninsured rates down 7 percentage points from 2013

A new survey by Gallup finds that uninsured rates across CSG/ERC states dropped by almost half from 11.9% in 2013 (before ACA implementation) to 6.9% for the first half of this year. Nationally state uninsured rates dropped by 5.6 points on average but states that chose to both expand Medicaid and create a state-based health insurance exchange averages 7.1 point drops. Of the seven states with 2015 uninsured rates under 5%, four are in the ERC region. Rhode Island is tied with Oregon for the third biggest drop in uninsured rates among states. An early CDC survey published in June found similar results.

Uninsured rates, Gallup-Healthways Well-Being Index
2013 1st half 2015 point drop % drop
CT 12.3 5 7.3 59.3%
DE 10.5 9.9 0.6 5.7%
ME 16.1 9.4 6.7 41.6%
MD 12.9 7 5.9 45.7%
MA 4.9 3 1.9 38.8%
NH 13.8 8.7 5.1 37.0%
NJ 14.9 9.7 5.2 34.9%
NY 12.6 8.3 4.3 34.1%
PA 11 7.7 3.3 30.0%
RI 13.3 2.7 10.6 79.7%
VT 8.9 4.6 4.3 48.3%
ERC avg 11.9 6.9 5.0 41.4%
US 17.3 11.7 5.6 32.4%