America’s Health Care Costs Are Crushing the Economy and Aetna’s Departure from Obamacare Individual Insurance Market

 

18221676_1189702134492777_1657203722031334742_nI am frustrated at the attitudes and responses to the election, the Trump administration and the health care battle. The entitled liberals are upset that they lost the election. Trump and his administration are intent on their strategy to replace and repeal Obamacare and change the tax code. And the Democrats are intent on obstructing everything that the Republicans want to pass and blame all their shortcomings on the Russians. They are salivating on the possibility that President Trump may be impeached. What a bunch of entitled, spoiled children! I have never seen so much anger.

During the last 8 years we did realize the shortcomings of Obamacare and seemed to focus on those, instead of the positive improvements to healthcare delivery. But most of all we forget that Obamacare is non-sustainable financially.

Case in point, Health insurer Aetna Inc. said last Wednesday that it would exit the 2018 Obamacare individual insurance market in Delaware and Nebraska – the two remaining states where it offered the plans.

Aetna had already said it would exit the individual commercial market in Virginia and Iowa, after pulling out of several other states last year. Aetna has now “completely exited the exchanges,” the company said in an emailed statement.

Insurers Humana Inc. and UnitedHealth Group Inc. have also pulled out of most of the government subsidized individual health insurance market.

Republicans in the U.S. House of Representatives last week voted to undo the Affordable Care Act often called Obamacare, the signature domestic achievement of former President Barack Obama.

But even if the Republicans’ bill – known as the American Health Care Act – if passed by the Senate it would not solve a critical outstanding issue for insurers looking at 2018: Will the government continue to fund the cost-sharing subsidies that help individuals pay for care?

Health insurers have said they cannot plan amid the uncertainty. In addition, the balance of sick and healthy customers has been worse than expected, and premium rates on the individual insurance market went up 25 percent this year.

“This decision is not a surprise given continued uncertainty about market stability and whether cost-sharing subsidies will continue to flow,” Evercore ISI analyst Michael Newshel said in an investor research note.

He noted that only one health plan remains in both Delaware, where Highmark Blue Cross Blue Shield sells Obamacare coverage, and Nebraska, where Medica still offers coverage but has warned it may exit the program.

Aetna projected around $225 million in losses from its exchange plan businesses this year following a loss of $700 million for 2014 through 2016.

The insurer attributed the losses to “marketplace structural issues that have led to co-op failures and carrier exits, and subsequent risk pool deterioration.” Aetna said it had 964,000 individual commercial plan members as of the end of 2016, but that number dropped to 255,000 at the end of March. Evercore ISI said Delaware exchange sign-ups fell 2.4 percent year-over-year in 2017, while sign-ups in Nebraska fell 3.9 percent, which was close to the 3.7 percent nationwide drop.

Jocelynn Smith reported on the health care costs and how they are a big part of the economic crisis and its burden on the health care here in America. There are the health insurance premiums, the copays and the deductibles. Each year, all those costs go up and far faster than any potential increases that I’m seeing in my paycheck. Health care in America is eating up larger chunks of my income, forcing me to more often skip those doctor visits or cut spending elsewhere in my life.

I’m not the only American making these tough choices about where my money is being spent. Health care is taking a bigger bite out of the wealth of America, putting our entire economy in danger…

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The Taxing Burden of America’s Health Care:

A few weeks ago Ms. Smith’s article took a closer look at the debt burden that Americans are struggling under that will soon have a significant impact on their spending habits despite the fact that we have a Federal Reserve crowing about how we’ve approximately reached full employment and that wage growth is sitting at 2.7% on an annualized basis.

We are seeing more and more Americans reporting that it is difficult to pay their monthly premiums, copays and deductibles.

Untitled.burden of healthcare.1

The Kaiser Family Foundation (KFF) revealed that insurance premiums soared 213% since 1999 for family coverage purchased through an employer, while wages grew by only 60% and inflation is up 44%.

In fact, health care spending now accounts for more than 17% of the U.S. economy compared to less than 9% in 1980.

Even with insurance coverage, more adults are struggling with health care expenses. A recent survey by the KFF revealed that 43% of adults with health insurance struggled with affording their deductibles, while approximately one-third are having difficulty affording their premiums and copays. Both responses are up from their 2015 levels.

What’s more, the push for more Americans to have insurance coverage has resulted in an increase in what workers are paying for deductibles. In 2016, more than one-half of workers with single-coverage health plans paid a deductible of $1,000 or more compared to 31% of workers in 2011. The average deductible now sits at $1,221, up 63% from 2006.

Untitled.burden of healthcare.2

In addition, health care insurance premiums continue to rise, jumping nearly 80% over the past decade.

Untitled.burden of healthcare.3

Cutting Back on Spending:

Americans are having trouble keeping up with rising costs. The KFF survey reveals that 29% of Americans are having problems paying medical bills.

And when we have trouble making ends meet, we start changing our spending habits.

Of those who reported having trouble paying medicals bills, 73% stated that they have cut back on basics such as food, clothing and household items.

What’s more, 27% reported that they have delayed seeking health care they needed, 23% skipped a recommended medical test or treatment, and 21% failed to get a prescription for a medicine due to rising medical costs.

Washington is still at war over Obamacare and the next plan for America’s health care. Regardless of the long-term outcome, Americans are trapped in a situation where costs will continue to rise, and very likely faster than their own income is rising. In that situation, we are facing two possible outcomes:

  • . Americans pay their health care costs to stay healthy but start spending less on things such as clothing, restaurants, entertainment, vacations, household goods, etc. This will result in a decline in economic growth.
  • . Americans cut back on health care — skipping that needed test, doctor’s appointment or prescription medication — which results in poor health in America and an overall reduction in worker productivity. That, of course, leads to less income and less spending.

Either way, the economy is facing the potential for a sharp slowdown as Americans struggle under the increasing burden of health care costs. Unfortunately, I don’t believe that any of the angry people who are yelling at members of Congress really understand the economics, or care about the financial burden of a health care system that has subsidized 11-24 million people, depending on who you believe. How do we finance, or better, continue to financially support the Freebees/ Freeloaders who expect the young healthy people to pay for the those who are too lazy to work or be able to afford the high cost of premiums for insurance coverage.

Maybe we should consider a Single-Payer health care system. Even Aetna Inc. Chief Executive Officer Mark Bertolini , after announcing the exit of Aetna from 2018 Obamacare individual insurance market in Delaware and Nebraska, wants a debate about what a “single-payer” healthcare system in the United States would look like, but said he does not think the federal government should run it.                                          Maybe, we should have this debate!

 

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