Goldman Sachs hosted an investor call the other day.
It's insurance Analyst recommended investment in the major health care insurers, like Cigna or Aetna, to its clients because the very limited competition among major insurers will allow these firms to increase their rates to even major corporations with immunity.
So here's the siutation:
1. The average annual insurance premium for a family of 4 is now almost $14,000.
2. Over the past ten years, this average annual premium has risen 120%.
3. Using the same rate of increase over the next ten years, the average annual premium will grow to $28,600
4. For a number of factors, most health care industry experts believe the inflation rate over the next 10 years will be significantly greater than that seen during the previous 10 years, >120%.
So, if you still believe your firm will assume most of the cost increase in these premiums then you have no problem.
However, if you believe your firm will drop coverage or let the employee assume most of the increase, then you better start saving for a rainy day and forget your retirement plan or your kids' college fund.