Yes, that's the Titanic (image courtesy of National Maritime Museum)
This weekend, Anthem Blue Cross in California announced that their rates would go up as high as 39% in the next year. Up until a few months ago, when I got on my wife’s health insurance, this was my carrier. Health and Human Services Secretary Kathleen Sebelius wants answers, but in a general sense there’s not a lot she can do. Costs are rising at a rate where insurance companies feel the need to jack up their policy premiums to maintain their profits. And without any check on that, such rate hikes will continue.
So will this:
Insurers, drugmakers and hospitals will likely slash costs and merge companies to maneuver through a U.S. health-care landscape marked by rising medical expenses and the loss of millions of potential paying customers.
With Congress’ sweeping overhaul of the health system stalled, industry will seek its own answers to a push by government and the private sector to rein in costs, said Curtis Lane, senior managing director at MTS Health Partners, a New York-based equity fund. An aging U.S. population will spur demand for services and, at the same time, boost pressure to control spending, he said.
One solution will be increased consolidation, with companies led by WellPoint Inc., the biggest U.S. insurer by enrollment, and Community Health Systems Inc., the largest publicly traded hospital chain, scooping up rivals unable to “spread rising costs across fewer customers,” said Paul Keckley, of the Deloitte Center for Health Solutions.
Increasingly, out-of-work and older Americans are becoming eligible for public programs, reducing the profit pool for private insurers. They can only survive through market consolidation and continued subsidies like Medicare Advantage. Ironically, this consolidation will probably lead to major cost-cutting and putting thousands more out of work, making them unable to be eligible for employer health care, too.
You can argue about the health care landscape if we instituted this reform or that reform. There’s no argument about how dangerous and cruel the landscape will be under the status quo.
