Medical Premiums
The feature chart on Health Insurance Premiums is from the National Conference of State Legislators. Those not in a company plan and not getting rebates report increases of 50% or more.
Yet, the BLS tells us the Medical Services CPI rose only 1.7% over the last year. Medical Care Commodities (drugs) rose only 1.0%.
Rent
The Index for Shelter rose 3.2% according to the BLS. Primary rent rose 3.8% with Owners’ Equivalent Rent (OER) up 3.2%
The BLS does not consider home prices as part of the CPI. Instead, here is the exact question the BLS uses to determine rent increases: “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?”
OER has the largest weight in the CPI at 24.583%.
Not Inflation
The folks at the Fed do not count a penny of that as inflation. Instead, it’s called a capital investment.
Not all of that rise represents inflation. Homes are bigger, with more features and better windows, better layouts etc. That said, the bulk of the rise is indeed a function of inflation.
Case Shiller
The Case Shiller index measures repeat sales of the same house. Improvements or degradations may or may not be accurately priced in but the index provides another look at what inflation might be.
Case Shiller Year-Over-Year Increases
In November of 2012, year-over-year inflation topped 5% and from then until now, never dipped below 4.3%. Home price inflation is currently 6.0% rounded to the nearest tenth.
The BLS says shelter is up 3.2%.
The Fed cannot find inflation. It thinks inflation is too low. Collectively, they are crazy.
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Mike “Mish” Shedlock
welcome to my funny blog: link to freepicandvid.blogspot.com
Yeah, right. There is NO inflation – outside of home rents/prices, health care expenses and college tuition fees!
US insurance companies are trying to muscle in and ruin someone else’s National Health Service? Isn’t that like blaming a disease on the victim who caught it before you?
I think the comments agree in one regard: a number of things are less affordable than they used to be, especially medical care. Unlike some on this blog, I am not eager to have government take over what is left of the US medical system. I view government as being no more trustworthy than the average corporation. I would like them to get out of the business of paying other people’s bills and instead return to the roll of enforcing free market principles.
I think the comments miss the point. It is not about illegals but the financialisation of medicine that is ripping everybody off. Just the cost of your insurance companies as a % of GDP pays for our entire National Health Service, but even here your insurance companies are trying to muscle in and turn what was the most cost efficient and effective health care system in the world into a shameful replica of the abomination that is the US medical system.
Both health care and housing are getting less affordable for one simple reason: People are banned from supplying additional units, despite their ability to do so at below prevailing cost.
In free markets, prices drop. Which puts the onus on those who wants to make a living, to provide goods and services in an ever more efficient manner. Which lowers costs over time.
In every.single.free.marlet.ever.in.the.entire.history.of.the.entire.universe, downwards is therefore the trajectory of costs over time. Without a single exception ever. Past, present nor future. Not just amongst people, not just on earth. Heck, it’s not even limited to universes with anything resembling our particular set of natural laws. It’s genuinely universal: lower cost, more efficient providers and/or means of provision, will replace higher cost, less efficient ones. Lowering costs over time.
The only way to prevent this, is to straight up ban people from freely interacting. Which is nothing more than a slightly obfuscated way of stealing from both banned suppliers, and from those demanders who would otherwise have benefitted from the lower cost that free market supply would bring. AKA, crass theft: From those who produce and those who would buy their output; to unproductive incompetents with nothing going for them but closer connections to the thieves. Which, of course, neatly summarizes all that once-was America is about anymore.
@nic9075
I have to assume you have not personally been to an ER lately. If you are “self-pay” and are able to pay, being held for a few hours, a basic workup, and medication for a kidney stone will get you a bill for $15,000. The waiting area is clogged with people, some who have actual emergencies and some who do not. Due to the volume of people, check-in is typically quite slow. Those who do not have an actual emergency still get an exam and typically get a prescription (or a “Band-Aid” if you will), and that costs money and you can bet someone pays the bill. If not, then the hospital ends up closing its doors. The poor slob who is asked to pay $15K for a kidney stone is paying more than his share.
LOL!!!! ‘non profit’ and ‘hospital and is a complete oxymoron. And if you are dropped off at the ER without insurance, you basically get a band aid and sent on your way a few hours later.
{{{{{Oh and one other thing: Get rid of the law that prevents hospitals from turning away those without the ability to pay.}}}} Do you really and truely believe that hospitals don’t turn away people who can’t pay (or whose insurance won’t provide authorization to the hospital ) just because of some ‘law’?? LOL!!!! ‘non profit’ and ‘hospital
@truthseeker
It is probably not possible to find that statistic because hospitals do not officially check for citizenship.
Based on the Kaiser Health News article linked below, in 2011 more than 100,000 illegals received ER treatment paid by the US taxpayer and the cost was estimated to range from tens to hundreds of millions per year for each state, depending on the location:
link to khn.org
After necessities like medical care get too expensive to subsidize, the next stage in this government managed process is price controls and after that, shortages. The stupid part is, all that could be avoided if lawmakers could simply resist the urge to continuously jerry-rig parts of the economy for political gain. It is not as though no one has ever seen this movie before. Here’s hoping our US leadership recognizes the plot before things get too bad.
Yeah, right. There is NO inflation – outside of home rents/prices, health care expenses and college tuition fees!
@DBG8489:
I agree and also want to point out that prices paid increases any time government raises demand by subsidizing the purchase of anything: College tuition (student loans), Housing purchase (Fannie Mae), Automobile purchase (cash for clunkers), Medical care (Affordable Care Act).
It boggles the mind how many ways government continuously pushes for higher prices. But hey, when the yardstick to measure one’s economy includes all spending regardless of how stupid or wasteful, what does one expect?
Oh and one other thing: Get rid of the law that prevents hospitals from turning away those without the ability to pay. This law – more than any other – is what drives the costs of health *care* – especially emergency or hospital-related care – UP. If the hospital is told they have to (by law) eat $1M for treating a homeless person who falls off a bridge, what do you suppose they will do? Hint: They won’t eat it. They will distribute that cost among the items they sell to *paying* customers – thus $15 Tylenol and $5 Band-Aids.
I *hate* that the enter key makes it post…
Make providers post a menu of prices for services – the price is the same whether you are paying cash or using insurance
Complete transparency so the end user knows the *exact* cost – not some inflated costs that the provider makes up while then allowing the insurer to pay less
And finally – the distinction needs to be shouted far and wide that paying for “medical insurance” is NOT paying for “health care”. Insurance is something you have to help with unexpected costs. Health care is an ongoing thing – like getting the oil changed in your car, or getting your tires rotated. Most of it is *expected* maintenance of the body and mind.
@themonosynaptic
Medical costs go up because of a lack of competition and collusion between the providers and the insurers.
Get rid of artificial limits on the number of medical school candidates.
Get rid of the “need-based” bullshit that governs where medical facilities may or may not be built.
Allow insurers to offer their products where ever they wish – and in an “a la carte” fashion.
Stop letting providers give insurers a different price than the cash price
House prices grow at a combination of inflation plus productivity over the long haul, assuming the analysis is sufficiently numerate to cope with simple variables such as larger houses and more and higher quality equipment (e.g. central A.C.) and construction (e.g. modern windows/roofs) – Case/Shiller tries to do this and is about as good as it gets at the moment. The problem is that productivity gains that used to flow across the whole economy have been vacuumed up by the top 20% for the last few decades, squeezing most people into larger debt to fuel their need for the HGTV ideal.
Medical costs are going up because the hospitals and large provider groups currently have strong pricing power. Doctors and other staff are being squeezed at the same time. Pharma companies are also seeing non-market driven pricing power thanks to the dumb idea of allowing them to charge retail in Medicare D.
@Gondwhana … look closer yourself. Income had a recent “surge” (that’s a big growth for those of you zoolander models who don’t read good). Despite the income SURGE, obamacare costs grew even more — ergo the percentage of total income taken by obamacare was up — as in Obamacare costs grew by an even bigger surge.
I understood the scale of the chart from the get go. It is the people making stupid excuses for a con-man that keep showing innumeracy (that means you can’t do math). Enough with the lies and the poor attempts at political spin. This insurance scam is a stinker, the math makes no sense, and every time someone tries to argue 30% yoy premium increases is less than GDP growth IT MAKES YOU LOOK STUPID
I don’t pick colors of dots and have no idea how they are assigned.
what they are is the percentage of US median income…so every year it becomes a larger net percentage of income, but the annual change is in the range of between 0.2 and 0.9 percent actual increase annually.
Medexman…look closer. Those numbers are not annual increases YoY.
In 2006, 2008, and 2009 — premiums paid by employees under employer plans went up 6.5%, 7.1% and 7.5%… in the most recent three years those premiums went up 9.1%, 9.6% and 10.1%. Under what warped version of math does this constitute a “slow down” in premium growth since obamacare started? What school of stupid are these “journalists” attending that ~7% is less than ~9.5%? Its one thing to spout propaganda, but this is just stupidity.
And those numbers don’t count the portion of premium increases absorbed by employers — which makes the increase in premiums MUCH higher. As Mish alludes to, those buying obamascam policies on their own (aka small businesses and their employees) have seen premiums climb 30-50% per year (plus deductible increases).
No matter what one’s politics, these idiots claiming that obamacare slowed cost growth are too stupid to be employed. This is basic math that these morons are failing. 9.5% is greater than 7% (if the graphic is believed). Individual premiums are climbing 30%… while GDP is supposedly growing 3-4% nominal. Only a blithering idiot would suggest obamacare is anything other than an epic disaster….
And Congress exempted themselves, so obviously they don’t believe in obamacare either. Its time to admit the entire concept of “free” medical care (when doctors don’t work for free) was a scam. Obama is a con man, and if you are a democrat — obama’s lies are the reason you must salute Trump today.