Healthcare Crisis – Staggering Increases!

Health Insurance premiums for individuals are about to literally skyrocket! Posted increases range from 9% to 50%… with regulators supposedly agreeing to the rate hikes because the insurance companies claim ‘huge losses’. Oklahoma, Arizona, Minnesota, and Tennessee will bear the largest brunt with less than a handful of states getting the 9% increase. Really?

Because that’s not what their posted financial statements indicate – at all.

United Healthcare: 2016 – Boasting an increase in revenues of 12% year over year, earnings growth of 19%, cash flow up 22%, stable medical trends, increased investment, and a 25% growth in dividends! Hardly a company in crisis mode needing to increase premiums upwards of 50%.

Aetna: While their results aren’t as spectacular as United, their year over year revenue increased 8%. They made the statement in the quarterly report that increases in membership thru their Government business accounted for the most growth. But their Balance Sheet showed an interesting change. Assets increased 32% including cash offset mainly by long term debt which is most likely connected to their takeover of Humana for $37 billion in cash and stock.

Does that mean that rate increases are actually designed to help insurance companies payoff debt due to merger and acquisitions? Or is it to relieve the burden that the Government has assumed under the Obamacare initiative to provide subsidies? In either case, the cost of health care is about to implode on people whose earnings have changed little to none to compensate for this enormous increase.

Blue Cross is characterized as a nonprofit and thus their financials reflect a relatively small year to year variance in accordance with their status per state law.

Kaiser also paints a rosy picture of their membership, revenues and future reporting year over year growth of a solid 15%.

United Healthcare’s CEO has a base salary, incentives, and stock options that has varied from $102 to $21 million depending on whether/or how much of his stock options he decides to exercise. So I would guess that he is hardly in ‘dire straits’ as a result of the ‘massive heathcare losses’…

Why doesn’t the Government care about the increases? Because it would seem to NOT apply to them. In a table that provides rates for government employees by state and by carrier, the rates for 2016 vs 2017 showed little to NO increase in premium cost – and in some cases showed a ‘reduction’ in premium cost. This would indicate that the individual coverage increases are now subsidizing government employees!

In Colorado, both Humana and United Healthcare are abandoning the individual marketplace next year and those having insurance will have to find a new carrier. In some counties across the US there are NO insurance companies offering healthcare under the exchange. For example – 400,000 individuals in southern Arizona will have no choice – no insurance. And entire states are reporting that only one healthcare carrier is now offering insurance creating a monopoly of pricing in which case by case costs can vary at the whim of the carrier.

It has become what it was designed to be – a complete, utter, failure so as to usher in a massive government one issuer plan nationwide as major carriers gobble up every smaller issuer. In the end – one will remain standing. And that one will become the government’s chosen program.

Given the government option has failed so miserably in the UK and Canada where mass exodus has people flying to India and Cuba to get treatments, it is preposterous to use those systems as an example for the US. France boasts healthcare for all, but a shortage of doctors is creating an implosion. Wait times for an MRI can be over a month and a CT scan 2 ½ months. They claim a shortage of equipment, and equipment failures have resulted in thousands of deaths. While the ‘public insurance’ services everyone, the wealthy tend to purchase private insurance which offers more comprehensive care, less wait times, and thus a chasm of ubers vs. everyone else is created.

Of course salaries vary widely in the medical field in the US vs UK and EU. Doctors and nurses in the UK earn less than half what their peers earn in the US, which translates into the cost for procedures as well. And while salaries are half, the cost of living in the UK is only about 13% lower than the US.

Does Socialized medicine work?

While the individuals have benefited from lower healthcare costs in France, whose system is ranked #1 in the world, it has come at a cost. Touting out of pocket healthcare costs as nearly nothing, the system has become over-burdened and operates at a deficit despite heavy revenue from taxes. As a result, France continues to cut jobs in their national hospitals which of course increases wait times, stress, quality and effectiveness.

And while the aging populations of Germany and France have been the main source of the burden, the idea that bringing in large swathes of young refugees to populate, procreate, and become an added source of revenue as they begin to fill jobs – was incredibly short sighted. Instead, they have brought in a host of diseases that were previously erradicated.

Mirroring that system in the US would require a massive overhaul of our tax system, massive income and sales tax increases, use tax increases, property tax increases, and a standard of living cut in half.

Middle class will become the new poverty as healthcare becomes the catalyst.