This newsletter will be relatively short and covers the impact of health care reform legislation and investment strategy. First an update on performance of investments using the current investment strategy for an economy that is stabile and preparing to grow. CONGRATULATIONS, all of the accounts are doing very well, growing nicely. At the end are some health care facts for your enjoyment.
If the health care reform legislation passes today will it alter my investment strategy? While this is very important for numerous reasons and may impact us in the future, it will not change the current investment strategy. The reason is that the impact of the legislation will occur with time such that it will not significantly alter the performance of the economy. The most important thing to do is to understand the legislation and the impact on a personal level.
US Health Care Facts
• The United States is the only industrialized country in the world without a universal health insurance system.
• Half of all bankruptcies are caused by medical bills. Three-quarters of those filings are people with health insurance.
• U.S. health care spending is approximately $2 trillion per year, or $6,697 per person. The United States continues to spend significantly more on health care than other countries in the world.
• Administrative costs account for 31 percent of all health care expenditures in the United States. The average overhead for U.S. private health insurers is 11.7 percent; for Medicare, it is 3.6 percent; for Canada’s national health insurance program, it is 1.3 percent.
• A baby born in El Salvador has a better chance of surviving than a baby in Detroit.
The infant mortality rate in Detroit is 15.5, compared to El Salvador's rate of 9.7.
• Canadians live three years longer on average than we do.
• There are four times as many health care lobbyists in Washington as there are members of Congress.
• Ninety percent of Americans believe the American health care system needs fundamental changes or needs to be completely rebuilt.
Showing posts with label Health Care Reform. Show all posts
Showing posts with label Health Care Reform. Show all posts
Sunday, March 21, 2010
Sunday, December 20, 2009
Health Care Reform
The news this past week has been the Senate passing a Health Care Reform bill by Christmas, hopefully a good gift to us but probably not. While many cover the political aspects of this bill, this newsletter will focus on the financial aspects.
A bill will get passed during 2010. Once the Senate passes their bill the process is only about half done. Next a compromise bill will be drafted by the House and Senate committees. This compromise bill will be approved by the House and Senate and then go to the President for signing. Expect this compromise bill to include many of the things that have recently been taken out. A main reason is that only 51 votes are needed in the Senate once it comes out of committee instead of 60 and the more liberal members of the Senate will require things, like the public option, to be added back before giving their approval. People who are more politically astute can give you the rest of the details.
Three underlying themes have existed during the debate: insurance coverage for more people, higher taxes, and reduced Medicare expenditures. These 3 things are going to happen regardless of the final outcome, public option or not. Personally, I am not sure a Republican bill would look much different than what is currently being proposed in the Senate. So what does this mean financially?
Insuring about 30 million more people who are currently not insurable means that most likely your future insurance premiums are going up. Since insurance companies are in business to make money they like to insure healty people who have smaller claims and expensive people tend to get dropped. Personally, I view insurance companies unfavorably for the way they tend to treat people to get bigger bonuses for executives. In essence, expensive people are going to be added increasing the cost of claims and raising rates.
The idea of higher taxes has been a constant theme. What is not known is how it will be done, this is still not visible to us. Expect less visible taxes, like estate taxes, to be raised and deductions to be taken away. This has been a constant theme this year.
Reducing Medicare benefits is not fully known yet. Obviously, the thing that is being touted is elimination of fraud and waste. While this is hopefully true, most likely it means that more expensive Medigap policies will be required to cover expenses once you reach 65 and go on Medicare as Medicare benefits are being reduced.
Bottom Line: This is going to cost you more money, avoid investing in health insurance companies, and be a good steward of your resources. You need to ready yourself, not rely on the government that is deep in debt for help, and be prepared for a future with fewer benefits from government organizations.
A bill will get passed during 2010. Once the Senate passes their bill the process is only about half done. Next a compromise bill will be drafted by the House and Senate committees. This compromise bill will be approved by the House and Senate and then go to the President for signing. Expect this compromise bill to include many of the things that have recently been taken out. A main reason is that only 51 votes are needed in the Senate once it comes out of committee instead of 60 and the more liberal members of the Senate will require things, like the public option, to be added back before giving their approval. People who are more politically astute can give you the rest of the details.
Three underlying themes have existed during the debate: insurance coverage for more people, higher taxes, and reduced Medicare expenditures. These 3 things are going to happen regardless of the final outcome, public option or not. Personally, I am not sure a Republican bill would look much different than what is currently being proposed in the Senate. So what does this mean financially?
Insuring about 30 million more people who are currently not insurable means that most likely your future insurance premiums are going up. Since insurance companies are in business to make money they like to insure healty people who have smaller claims and expensive people tend to get dropped. Personally, I view insurance companies unfavorably for the way they tend to treat people to get bigger bonuses for executives. In essence, expensive people are going to be added increasing the cost of claims and raising rates.
The idea of higher taxes has been a constant theme. What is not known is how it will be done, this is still not visible to us. Expect less visible taxes, like estate taxes, to be raised and deductions to be taken away. This has been a constant theme this year.
Reducing Medicare benefits is not fully known yet. Obviously, the thing that is being touted is elimination of fraud and waste. While this is hopefully true, most likely it means that more expensive Medigap policies will be required to cover expenses once you reach 65 and go on Medicare as Medicare benefits are being reduced.
Bottom Line: This is going to cost you more money, avoid investing in health insurance companies, and be a good steward of your resources. You need to ready yourself, not rely on the government that is deep in debt for help, and be prepared for a future with fewer benefits from government organizations.
Subscribe to:
Posts (Atom)