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Yesterday I received what was either a Halloween trick or extortion: a letter from Blue Cross Blue Shield notifying me of a 24% rate increase starting January 2010. Quite simply, this is price gouging per se.
Since this is a financial media site, I thought it would be educational to demonstrate how such unreasonable price inflation is completely unsustainable:
We are Americans
At the current pace, on my 54th birthday I can look forward to spending over $1 million a year on healthcare (but my bank will be broken many years earlier).
I can already hear the Blue Cross Blue Shield rebuttal now: “The average rate increase is 11% and your increases will not be as high in the future.” Well, since I have a sweet file in my basement, I found that 1) I have never had less than an 11% increase, and 2) I recently had an increase of 18%.
Those are huge numbers considering wages are not growing (I am lucky enough to be making money), we are in a recession, and there is absolutely no low-risk investment vehicle which can consistently match those type of returns in order to keep up. There is no way the middle class can absorb this burden. And the idea of saving for retirement and children’s eduction is becoming a bad joke which insults the efforts of young workers.
This is the type of fiscal black hole which will literally destroy any future economic prowess in the United States. Further, if healthcare costs continue on this trajectory, there will be a major brain drain as intelligent and productive citizens depart for saner pastures. Honestly, for the first time I am wondering whether my young family needs an exit strategy from this mess.
As I have said before, I do not know whether a public option is the answer. However, the system is completely broken when a healthy, fit family in their early 30′s is paying meaningful money for healthcare they will most likely never need. If the government can step in and stop gas stations from gouging, it’s time they crack open insurers’ books and see whether they are doing their part to help revive our economy.
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I’m really tired of insurance companies getting away with this! They are taxing us more and more each year and their execs are paid way too much.
I have to agree that, as a society, insurance premiums are certainly an inefficient use of money. We have a high deductible HSA with Blue Cross for our family of four, I’m self-employed, and our premiums actually went DOWN a whole dollar per month. Thanks for taking up my slack Damien. ;)
But what’s the answer for who people can’t afford a really high deductible?
I will have to look into a high deductible HSA. It’s sad.