Goldman Sachs hosted an investor call the other day.
During the call. an insurance Analyst recommended investment in the major health care insurers, like Cigna or UHC, 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 is the situation:
1. The annual health insurance premium for a family of four is almost $14,000.
2. Over the past ten years, this average annual premium has risen 120%. Most Aetna and Athem individual policy holders have recently received rate increases ranging from 18-39% in California with another increase expected before the end of this year.
3. Using the same rate of increase over the next 10 years, this 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.
Think about it!
Thank you for a great post.
We can add:
a) The number of people who die annually from lack of health insurance will rise from the current estimate of 45,000 to closer to 100,000
b) the number of people who file personal bankruptcy every year because of unpayable medical bills will rise from approximately 2 million to closer to 3 million
c) The percentage of Americans without any health insurance at all will rise from one-sixth of the population (about 50 million today) to closer to one-third (over a hundred million)
d) a substantial percentage of America's emergency rooms will close their doors as they become the only source of medical services for uninsured people, making the situation radically worse and
e) 10 or 20 or 30 years from now, a future Congress and a future President will adopt the reforms this Congress and this President should adopt today, millions of deaths and bankruptcies and trillions of dollars later.
...or it could be that once people are forced to pay for their own healthcare they will buy it wisely and prices will fall 74%.
That's the difference between my healthcare costs of $3,048 per year and the "$14,000" that everybody who gets it for free is alleged to pay.
Most cancer and transplant patients are old. And most of the old are not cancerous or needing transplants. So, it's a gamble to get cheap insurance with benefit caps. Of course when the unexpected hit, they go bankrupt and we help pay their medicaid.
The two biggest problems with health care today are:
1. There is no price shopping by folks using health care services if they have insurance.
2. All those folks that are employees of Health Care insurance companies add to the cost and none of them practice medicine.
The problem is that corporations are paying the health insurance with company money, which is also a tax deduction, and don't shop it carefully.
I'm in my 50's and cover my family for $3,648 per year with Humana.
If health insurance cost $14,000 I wouldn't buy it. Humana knows that and sets the rate for individuals at a price we can afford.
If more individuals paid for health insurance out of their own pockets like I do the price would be lower. Dropping the rate from $14,000 to $3,648 is a reduction of 74%.
In a market economy supply and demand has to equal out. By definition there cannot be more healthcare dollars spent than people can afford to pay. The best way to make it affordable is to have people pay for healthcare out of their own pockets instead of on somebody else's nickel.
What do you expect when we give free hc to millions of illegal aliens? Illegal aliens are the majority of who will continue to get free hc if the idiots in the federal government take over. Then the rest of us will have a real mess. Cut out the illegals, make tort reform a reality, cover pre-existing conditions, let the dust settle then make more changes as needed.