Nothing new about that. What is of concern to me is the continuation of the status quo. As a society we continue to do the same thing while expecting a different result. Even a single-payer health system will have many of the same fundamental problems we have today. In my opinion, American health care is in crisis and as consumers we can do something about it now.
Over the past two decades we have seen the cost of medical insurance skyrocket. The National Coalition of Health Care reported that the average annual cost of health insurance has risen to $10,000 for a family of four and to $3,695 for a single person.
Traditionally, businesses have absorbed the increases. However, these cost increases have finally broken the employers’ proverbial backs and employees are being asked to share in the cost. If you did research on recent labor strikes or contract negotiations you’d find that benefits — medical benefits in particular — are always a major stumbling block. Gone are the days of unlimited benefit packages paid for by our employers.
A report from the UCLA Center for Health Policy Research concluded that job-based health insurance is declining and will continue to do so. More the 6.6 million Californians under age 65 went without insurance for at least part of 2003. The main reason the uninsured give for not having coverage is, “I can’t afford it.”
The writing is on the wall for consumers. Insurance costs will continue to rise and individuals will be asked to participate/share in those costs. Specifically, we will be using more of our wealth to pay insurance premiums, and potentially, without some systemic change, more Californians will be without health care coverage altogether.
As consumers, we need to take steps to reduce our dependence on the health care system. We need to consider just how we use health care and we need to take responsibility for our own health. We need to be selective in the types of plans we choose, focusing on our needs rather than our wants. If we don’t, the health care system will continue to decline while we spend more and more of our wealth supporting it.
As consumers, we need to better understand the total costs of health care. We need detailed cost information from the medical providers and the insurance companies. Along those lines, two insurance carriers are testing programs allowing consumers to compare prices for basic medical procedures. Aetna and Wellpoint have programs where patients can shop for services based on the costs from different health care providers. By doing so consumers can work actively to reduce the overall cost and more importantly return competition to the industry. This is a step in the right direction.
Rather than seeing the glass as half empty, I see it as half full. Although the costs of insurance and medical care have risen, many of us are over-insured. We have been playing the game by the insurance companies’ rules, depending on our employers to foot the bill.
Let’s continue to demand greater transparency, review how we use medical services and choose an insurance plan that fits our specific needs. Get advice if you’re confused — and we all are confused— before choosing your health plans. Not only will this save our employers’ money, but also will certainly save us money in the form of reduced co-payments. I trust you’ll all know what to do with your newfound wealth.
Follow-up:
In my June 30 column, I discussed the possibility that we may be experiencing a real-estate bubble and I recommended caution when choosing a loan. Based on the response from some of my readers, my concerns were considered a bit alarmist. Locally, home values continued to rise and sellers have been reaping the reward. In fact, there seems to be no end in sight. Or does the old adage, we can’t see the forest through the trees, apply here?
There has been an unprecedented level of speculative purchases over the last few years. In fact, the National Association of Realtors reports that 36 percent of home sales in 2004 were second homes purchased primarily for investment. Buyers should consider that you may be getting in late. It’s the difference between chasing the trend and being ahead of the trend. Small investors, those with less than $1 million in assets, may be playing a dangerous game.
—Stephen Bossio is the principle of Magnum Financial
(Smart Money + Good Thinking) and can be reached by phone at 707-996-9664 or sbossio@sammonsrep.com.
Stephen offers securities through Sammons Securities Company, LLC Member NASD and SPIC. |
