Has anyone discovered (although very early in this game) data about how much money may be drawn away from discretionary income in order to fund individual health care plans?
The preliminary view appears that middle income wage earners may have higher monthly premiums and much larger out-of-pocket costs with copays and deductibles with their new healthcare plan.
All of this would add up to retard some folks and their ability to have "extra" cash to spend into the economy.
Thank you in advance for your thoughts on this subject.
Take care,
Catch
Comments
I've been thinking about this for the last couple of days and I really do think that it will have at least a moderate effect on discretionary.
If someone buys insurance that didn't have it before, pro for insurance and health care industry, potentially negative for discretionary.
If people have higher costs now with new plan (and that's an *if*, I don't want to get into a debate on the pros or cons or politics) after their prior plan was cancelled or whatever, less for discretionary spending.
If people don't buy and just pay a penalty, that's positive for government and negative for just about everything else.
I think this effect is something that people have to think about. Health care should benefit, but if people aren't signing up, possibly it won't - not that I don't think health care isn't a good place to be longer-term.
For some with a choice, the private insurance may offer a better deal than the exchange.
I should think health care in general, including big and little pharma and technology, might absorb any shocks and continue to be a good bet for investment dollars.
Some with preexisting conditions, etc., and uninsurable before have now signed up for insurance. That's the other side of the coin: dollars coming into the gov and the health care system that weren't, before. I think it's a relatively small amount, though: again, I have no data.
I've thought about investing in booze lately, but I don't think anything seems like much of a value - Diageo, Beam, etc. I continue to own Ambev.
Health care is appealing, but the H & Q funds have already done incredibly well. I could add to Amerisource Bergen (ABC), but I'd rather that cool off a bit first. I'd also like something with more of a div. Maybe PFE or LLY?
I continue to like energy infrastructure and financial infrastructure (FIS/FISV)
Costco is kinda interesting to me, but not as much at this level.
I've looked at a couple of preferred stocks.
Maybe continuing to look overseas, instead.
Also consider that with more widespread and adequate coverage the health of masses will improve over time and with the insurance at the back pocket, the society might have less saving for health-care which in turn can lead to higher discretionary spending as well.
Costco is interesting to me as well, because Obama said "Shop around get a better deal".
Since I have already been to Blue Cross and Aetna, the only two health insurance providers in Philadelphia and everything is marked up, he must have been referring to food at Costco or Trader Joe's
Have a great weekend!
Mona
Studies show that 65 year olds are in better condition than 60-64 year olds, because they have universal health coverage (Medicare). We should expect to see similar health improvement in "younger folk" as health insurance reaches more people.
Also, one of the few cost containment measures in ACA (which has already been in effect since 2011) is the requirement that 80-85% of premiums go for actual health care and quality improvement ("medical loss ratio"). So less should go into the pockets of insurance company investors (or the company executives), and more remain in consumer's pockets. In the long term, this should also help discretionary spending.
Aetna had to send rebate checks for 2012 totalling nearly $2.7M to individual policy holders in Pennsylvania alone. I got a rebate check from my insurer as well. I did not, however, go right out and buy a new iPhone.
In the short term, I expect discretionary spending to drop - regardless of whether the net consumer costs (after rebates, subsidies, expanded Medicaid, etc.) are higher or lower. I attribute that to the FUD (fear, uncertainty, doubt) being created by politicians and a system with more than its share of bugs.
Nifty November to all
I got my Blue Cross Blue Shield increase recently. Included was a page showing the reason for the increase for all the requirements of the plan.
Young males - around 21 get hit with the greatest increase.
The young are paying for the illnesses of the old. Men are paying for check ups for women. And everyone is paying for others with existing conditions - Cost to cover preexisting conditions & the Cost to charge the same for men & women and to limit how age can affect plan costs.
It will drain $ from the economy - those that didn't have ins will now need to have it or pay a fine - yet all those that didn't have insurance did not and will not use the ins. In other words previously, the cost of treating those without ins was less then what those people will be paying for ins or the fine.