Health Insurance Companies Price Gouging the US Economy

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:

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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Comments

[seawolf77]

And this is what they are fighting for. When some one has what it takes to keep you alive and they won;t give it to you becasue you won;t give them money that;s called extortion. Gangsters go to jail for it. Insurance company employees get promotions for it. In the America I thought I lived in you pay, you get, you don;t pay, you don;t get. How many people have had thier insuarnce companies or cell phone companies charge you an extra couple of months becasue, and here you just have to fill in the blank, that's how they want it. I love getting those bills, month after month , year after year, knowing those people will never see another dime of my money but will keep trying until they are dead. Listen to me if any of you are reading this. I am laughing my big fat butt over you.

[DrInsula]

You are so very right! I am a neuroscientist with lots of education, research background etc., almost all of my frinds have similar qualifications. ALL of us want nothing more than to get out of here, to a country that makes sense and does not have the HUGE impediments to quality of life that exist here. The only reason we are here is because our elderly parents are not in a position to join us in fleeing the U.S. for lands of opportunity.

[Solandraguy]

This is frightening to me. My grandparents came from Europe only a hundred years ago. I find myself agreeing with the above comment. I see our govt in total gridlock with special interests having too much to say etc. Is leaving America going to be the inevitable conclusion of many. I don't toatally disagree.

[Pablo Manriquez - Huffpost Blogger]

A brain drain, indeed. Posts like yours here prompt relief for my dual citizenship.

[Beegood]

thanks for this post. This is why the conservatives claim that we don't need healthcare reform doesn't hold water with most people. The insurance companies are completely out of control. This is not the "free market" it is a scheme to bankrupt America.