By Katherine Hobson – Wall Street Journal

A survey of big employers finds they expect their health-care costs to rise nearly 9% next year and plan to share some of that burden with employees via higher premiums and higher out-of-pocket limits.

The survey included responses from 72 members of the nonprofit National Business Group on Health, which represents large companies such as General Electric, Microsoft and General Motors. It parallels pretty closely another survey on employer health-care costs, by PricewaterhouseCoopers, that we reported on a few months back.

Some tidbits from the report, which you can find on the company’s website:

For he rest of this story, go to Big Employers Estimate Health-Care Costs Will Rise 8.9% in 2011

America’s baby boomers—those born between 1946 and 1964—face a problem that could weigh on the economy for years to come: The longer it takes for the economy to recover, the less money they’ll have to spend in retirement.

Policy makers have long worried that Americans aren’t saving enough for old age. And lately, current and prospective retirees have been hit on many fronts at once: They have less money, they earn less on what they have, their houses aren’t rising in value and the prospect of working longer to make up the shortfall has dimmed significantly in a lousy job market.

“We will have to learn to make do with a lot less in material things,” says Gary Snodgrass, a 63-year-old health-care consultant in Placerville, Calif. The financial crisis, he says, slashed his retirement savings 40% and the value of his house by about half.

Banks, home buyers and bond issuers are all benefiting as the U.S. Federal Reserve holds short-term interest rates near zero to support a recovery. But for many of the 36 million Americans who will turn 65 over the next decade—and even for the 45 million who have another decade to go— the resulting low bond yields, combined with a volatile stock market, are making a dire retirement picture look even worse.

Low yields present retirees with a difficult choice: Accept the lower income offered by safer bonds, or take the risk of staying in the stock market. Either way, their predicament could put a long-term damper on the consumer spending that typically drives U.S. growth.

“If these rates stay as low as they are, then a lot more people are going to be hurting,” says Jack Van Derhei, research director at the Employee Benefit Research Institute. The non-partisan outfit estimates that if current conditions persist, nearly three in five baby boomers will be at risk of running short of money in retirement. “There are going to be many luxury items that will simply have to be eliminated,” for retirees to make ends meet.

Despite the market’s rebound from the lows of 2009, nest eggs remain severely impaired. As of the first quarter of 2010, net household assets—homes, 401(k) plans, pension assets and other investments minus debts—stood at $54.6 trillion, down 18% from the end of 2007. That’s an average of about $171,000 per person, much of which is concentrated in the hands of the wealthiest.

At the same time, the return people can hope to earn on their assets has fallen, particularly for those who switch into bonds or annuities to guarantee a fixed income. The average yield on U.S. government, corporate and mortgage bonds stands at about 2.4%, while stock-market valuations suggest a long-term return of about 6%. At those levels of return, some 59% of people aged 56 to 62 will be at risk of not having enough money to cover basic living and health-care costs in retirement, estimates Mr. Van Derhei. If market returns are higher—8.9% for stocks and 6.3% for bonds—the picture isn’t a lot better: The percentage at risk falls to about 47%.

Before the recession hit, many economists assumed people would solve their retirement problems simply by staying in the work force longer. Now, “the recession has blown that idea out of the water,” says Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of a 2008 book that advocated working longer.

Older workers, who typically fared better than their younger counterparts in recessions, have been hit just as hard by layoffs this time around. As a result, the fraction of people 65 or older who are working has leveled off after a long period of growth. As of July, it stood at 15.9%, down from 16.3% in mid-2008.

For the rest of this article, go to the Wall Street Journal.

By SCOTT GOTTLIEB – Wall Street Journal

President Obama guaranteed Americans that after health reform became law they could keep their insurance plans and their doctors. It’s clear that this promise cannot be kept. Insurers and physicians are already reshaping their businesses as a result of Mr. Obama’s plan.

The health-reform law caps how much insurers can spend on expenses and take for profits. Starting next year, health plans will have a regulated “floor” on their medical-loss ratios, which is the amount of revenue they spend on medical claims. Insurers can only spend 20% of their premiums on running their plans if they offer policies directly to consumers or to small employers. The spending cap is 15% for policies sold to large employers.

This regulation is going to have its biggest impact on insurance sold directly to consumers—what’s referred to as the “individual market.” These policies cost more to market. They also have higher medical costs, owing partly to selection by less healthy consumers.

Finally, individual policies have high start-up costs. If insurers cannot spend more of their revenue getting plans on track, fewer new policies will be offered. No, You Can’t Keep Your Health Plan
Insurers and doctors are already consolidating their businesses in the wake of ObamaCare’s passage.

For the rest of this story, go to No, You Can’t Keep Your Health Plan.

I am curious about your thoughts. After reading this article, would you stop back at the comments section and answer this question? “Should Congress repeal the Obama Health Care Plan and create a new one?”

I was introduced to an essay by Clifford Asness, PhD, a product of the University of Chicago Booth Graduate School of Business. Yup, the same University of Chicago where President Barak Obama taught for a few years. Asness is not a Republican, he is well informed, well reasoned and, in my opinion, rather witty. I encourage you to take a few minutes to read through this essay. I believe it will present a different view of the health care issues being debated and possibly shed some further light on this debate. Be sure you do one thing when you read this, think. Dont’ allow yourself to decide first that he is right or wrong, ask yourself critical questions and think. It could be good for all of America.

With that as my introduction, I present to you the essay, Health Care Mythology by Clifford Asness.

I would love to have your comments on this subject since it is so timely and so important to the future health and economy of this nation.

Disclosure:

I have encouraged people to read this essay on other venues in addition to here. I have had some very strong emotional reactions. So, here is fair warning before you read. You will find, in addition to well reasoned arguments, a hyperbolic and maybe acerbic wit. If you cannot handle hyperbole, then do not read this essay. You will miss the point entirely – as have some readers already. If on the other hand, you either enjoy such wit or have the ability to ignore it if you disagree, then I encourage you to read and think.