Recent estimates predict that the population of adults 85 and older in the U.S. will almost triple over the next 40 years. Simultaneously, the working-age population is expected to decline. This means the people requiring support–the elderly–will outnumber the ones able to provide such support, financially and otherwise. AARP calls this the “caregiver cliff.”
Meanwhile, costs to provide health care are expected to grow by over 200% for those between the ages of 70 and 90. We already see that governments, payers, and manufacturers, aren’t really producing reductions in healthcare costs. So, seniors need care solutions in order to be prepared for this impending rise in costs.
The new developments in robot and AI technology is expected to employ virtual home assistants and portable diagnostic devices that will be able to help provide better elder care, help control medical costs—and allow more seniors to stay in their homes longer.
The question is how receptive seniors will be to this technological intrusion into their lives. Those in their 50s now will probably be more open to relying on technolgoy, while those 20 years older may feel very uncomfortable accepting these changes. Consequently, there will be a growing interest and market for already available and maturing technologies to support physical, emotional, social and mental health.
Stay tuned with this space as my new book comes out soon that addresses these realities: The 4Ts of Retirement Income Planning (the name is subject to publisher approval). I’m staying on the cutting edge of planning–make sure you’re there with me!
Healthcare costs are skyrocketing. Since the Affordable Care Act passed in 2010 health care costs have gone up by double digits each year. The health care bill did get more people insured and helped with issues like preexisting conditions, but the problem with the healthcare law isn’t what it tried to do, it’s what it failed to do: reduce costs. The solutions to the cost problem is with the free market and competition. Here are just three ideas that could make a huge difference.
Number 1: We can roll back the tax burden on insurance companies. The ACA added a $60 billion tax on health insurers, which made them have to charge more to consumers to cover their costs. Taxes roll downhill so a tax on insurers means higher costs for all of us.
Number 2: We can lower the regulations on health plans. The ACA has a lot of requirements that force insurance plans to cover an incredibly big list of benefits. If you want a bare-bones insurance plan that simply covers catastrophic events like a car accident or cancer you currently can’t get one. By boosting the benefits of every plan it restricts competition and drives up prices by forcing smaller health insurers out of the marketplace. Low-cost catastrophic plans that are normally purchased by younger, healthier people are no longer available because of the ACA requirements. Introducing as many health insurers to the marketplace as possible can drive down prices by encouraging businesses to compete to cut costs. The ACA did the exact opposite: Less competition and higher prices.
Number 3: Encourage medical innovation. The cost to bring a new drug to market already exceeds two and half billion dollars. And the ACA places an additional twenty-two billion dollar tax burden on innovator drug companies, the same businesses that produce lifesaving medications and cures for those in need. Punishing drug producers forces them to charge even higher prices to make up for the lost money in research, development, and taxes. If we encourage, not punish drug makers it will lead to more breakthroughs and lower costs–a win, win for all of us. As healthcare costs skyrocket, don’t forget that the free market is our best chance to rein them in.
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According to a study released in September, 2017 by eHealth, Inc.(NASDAQ:EHTH), which operates eHealth.com, the average family of three earning slightly too much to qualify for subsidies in 2018 would need to increase its household income by nearly $29,000 before health insurance became “affordable” based on Obamacare criteria.
The Affordable Care Act (ACA or Obamacare) considers health insurance to be “unaffordable” when annual premiums for the lowest-priced plan in a market cost more than 8.16% of a household’s modified adjusted gross income (or MAGI). When health insurance is unaffordable by this standard, individuals and families may qualify for an exemption from Obamacare’s individual mandate to buy health insurance.
Government subsidies are available to people earning up to 400% of the federal poverty level, but middle-income households earning 401% or more of the federal poverty level are not eligible for subsidy assistance. If you fall into this group that isn’t eligible for government subsidies, we can help you.
In preparing its analysis, eHealth reviewed the lowest-price 2017 plan available for families of three comprised of two adults age 35 and one child. The same family model was analyzed using data from Healthcare.gov in 40 cities, data from eHealth.com in 9 cities not utilizing Healthcare.gov, and data from the New York state exchange for New York City.
After applying a relatively modest annual rate increase of 10% to 2017 rates to project 2018 rates, eHealth discovered the following:
In 47 of 50 cities surveyed, the lowest-priced plan would be officially unaffordable under Obamacare affordability standards for families earning 401% of the federal poverty level (about $82,000 per year in the contiguous US, making them ineligible for Obamacare subsidies).
Among these, the average three-person household would need to earn an additional $28,939 per year before the lowest-cost plan becomes affordable according to Obamacare rules.
These figures are based on a uniform, conservative 10% increase in health insurance premiums between 2017 and 2018. In fact, some independent projections for 2018 have estimated that premiums may increase 20% or more on average. There will likely be significant variability in the actual rate increase in 2018 for each plan and each market.
Specific findings for surveyed cities are found below. A detailed analysis providing additional context may also be reviewed as an appendix prepared by eHealth which pairs the findings here with demographic data describing each city’s median age, median household size, and median income.
“Coverage under the Affordable Care Act is becoming seriously unaffordable for many families, even by Obamacare’s own rules,” said eHealth CEO Scott Flanders. “I find it hard to believe that the framers of the law ever intended the cost of family health insurance to rival that of a second mortgage. Without the introduction of lower-cost options into the market or expanded government subsidies, many middle-income Americans are in danger of being priced out of the health insurance market entirely.”