Early indications are that HMO rates will rise 7-8% next year. Compared to this year’s 10% average increase, that’s good news. And here’s just how good that news is.
Withfamily premiums (HMO and other plan types) hovering at the $11,000 mark, and rates increasing by, say, 7% per year, we’ll have health insurance costs of $20,000 per family in ten years. Truly the miracle of compound inflation (sorry, Benjamin Graham).
The 7% increase quoted is a wildly optimistic figure, as rates have increased at least 9% each year for the last five years. And, with the number of people without insurance increasing every year, further adding to cost-shifting to insureds; tighter eligibility requirements for Medicaid; and increased employee cost-sharing the middle class (read – voters) will be increasingly demanding action – and if the next presidential election does not have health care as a top theme, it will only be because of a horrendous natural or man-made disaster. Although one could reasonablyh consider the US health care system a man-made disaster, I’m thinking more on the order of foriegn policy.
What does this mean for you?
More pain before our elected officials get their collective act together.
Jun
15
For any meaningful healthcare reform to happen, I think it will be necessary for every interest group and constituency (consumers, doctors, hospitals, drug companies, device and equipment manufacturers, trial lawyers, etc.) to look in the mirror and make some judgments as to what they are prepared to give up in money or power in the short run in exchange for a better system in the long run that the society can afford and sustain.
Personally, I think things like user friendly price and quality transparency tools for doctor and hospital charges, elimination of the tax advantage currently given to employer provided health insurance, health courts to adjudicate medical liability disputes, and QALY metrics to systematically ration care for the severely ill (including the ultra expensive specialty drugs coming to market to treat various forms of cancer) would be steps in the right direction.
Wow, these are shocking numbers…We all know that health care is out of hand but it’s helpful to see the numbers once in a while to remember really how outrageous the costs have become! Thanks, Joe