Understanding Cadillac Insurance Plans: Benefits & Costs

A Cadillac insurance plan is a type of insurance plan that is considered to be expensive in relation to the majority of insurance plans on the market. The term "Cadillac insurance plan" is essentially a slang term that was started because Cadillac is synonymous with luxury in the automobile market in the United States. 

Cadillac insurance plans are generally purchased in order to provide extra benefits for the insured. For example, this type of coverage might have a very low deductible and no co-pay for doctor visits. You may not have to pay anything out of pocket when large medical expenses are incurred as there is no co-insurance. With this type of plan, insureds are essentially choosing to pay for medical expenses upfront in the form of medical insurance premiums instead of paying for them later when services are rendered.

Cadillac insurance plans have been involved in several discussions when talking about government healthcare plans. For example, when the Obama administration helped pass new legislation dealing with a government health care system, part of the debate focused around Cadillac insurance plans. Under the new legislation, they talked about charging an excise tax on these expensive health insurance plans.