Friday, November 6, 2015

Health Care Costs Are Rising Faster Than Other Costs and Will Continue to Do So Each Year ... So What Else Is New?

Inflation is generally non-existent in America these days, and prices are low. That general condition doesn't apply, however, to the much greater than inflation ongoing price increases in three heavily government influenced and subsidized industries such as (1) education from kindergarten through college, (2) housing and (3) health care.

To be forewarned is to be forearmed, so let's consider ourselves appropriately forewarned. The straight 'skinny' is that too much government 'help' isn't helpful. It always ends up being vastly more expensive while providing lower quality for consumers, users and taxpayers than free market competition would allow. That's a 2-fer that nobody wants or can afford.

So let's deal with the timely and specific issue of ObamaCare health care pricing today, since it's currently the program's annual renewal period. While ObamaCare is admittedly complex and much too hard to understand, it's imperative that we take sufficient time to familiarize ourselves with its various offerings, pricing and coverage each and every year. Otherwise we will be paying far too much for the already far too expensive coverage.

Developing the bad habit of inattentive and therefore unwise automatic retention of both carriers and coverage will result in tens of thousands of dollars in additional co-pays, deductibles, premiums and confusion about which doctors and hospitals are covered. And this wasted money could and should instead be set aside in a 401(k) or IRA for the long term financial health and well being of the buyer.

And one more thing --- while we may not like being subjected to government mandated health care coverage generally and the rules of ObamaCare specifically, for now we're stuck with it and probably will be for the indefinite future. So let's not make a bad situation even worse. Take the time to get educated and resolve to buy wisely and responsibly each annual renewal period. After all, it's your money, your family and your future.

Employees face higher health costs as open enrollment season starts contains this useful but unsurprising news:

"It’s open enrollment season, and for many workers that means learning they’ll be responsible for a larger portion of their health care costs in 2016. This growing burden is cutting into their retirement savings . . . .

Six in 10 workers agreed that the rising cost of health insurance directly affects how much they set aside in their workplace retirement savings plan . . . . That could mean leaving their 401k contribution rate the same when they really should be increasing it over time, or even reducing the rate at which they contribute . . . .

Employee healthcare costs have risen steadily in recent years as wages have stagnated. . . .

Deductibles have risen more sharply than premiums. . . .

The average deductible for workers with employer-sponsored health insurance who face a deductible is $1,318 for single coverage this year . . . .

Consumers on the individual insurance market have to contend with health plan deductibles that are even higher than those with workplace-based coverage. The average 2016 deductible for a silver plan on the Obamacare exchanges is $3,117 for individual coverage . . . while the average silver family deductible is $6,480, up 8% from this year . . . .

Those are lofty sums when nearly half of Americans would have trouble paying an emergency expense of just $400, according to a survey reported earlier this year by the Board of Governors of the Federal Reserve System."

Summing Up

Health care is already far too costly, but it will continue to get more expensive relative to overall costs with each passing year. So count on it, even if you don't like it

Now that ObamaCare is the law of the land, look for the 'Affordable Care Act' to result in all health care costs increasing at an even faster rate relative to other costs than has been the experience historically.

Anytime government purports to subsidize, control or otherwise manage costs for consumers,  it rapidly becomes an out-of-control and wasteful endeavor for individuals, families and taxpayers as a whole. Then it gets worse.

ObamaCare will be no exception.

That's my take.

Thanks. Bob.

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