Tuesday, April 07, 2015
More On That CES Mid-Year Update.
By quintile, it looks worse, doesn't it? The ability to save starts in the third (middle) quintile, and they lost over half of their excess income in a year. This is all the more material because of the higher deductibles and copays most are seeing for insurance!
As to access to significant care for the second quintile, it is really only in government insurance programs. In the first quintile, most get government insurance. And interestingly, the second quintile was the only group in which expenditures dropped. But the fourth quintile is the most interesting - it is important, because it accounts for an outsized amount of spending. They barely increased their spending. That's because they save, and their ability to do so was strongly impacted, and because they have been able to afford to spend more on higher quality items, and so they had room to cut back.
Looking at this, I wonder just exactly what that second low quintile was easting! They got HAMMERED.
But it explains everything about the 2014 elections, doesn't it?
Another thought-provoking table provides the shares of expense categories by income quintile:
(We have one CPI number, two if you count the SS version, but we really need three.)
The previous release shows the press from 2012 to 2013, which has information for the last several years. Income dropped from 2012 to 2013, by 2.8%. Expenditures declined less than 1%.
Anyway, the reason I was commenting in a prior post that I have doubts about the consumer's ability to carry this expansion is that I think they are running out of money. I think most would LIKE to spend more, but they won't.
Now we don't know what is going to happen this year, and we can't, and we don't have precise figures for about three quarters of a year.
BUT: The reality is that the recent changes to health insurance have, for the majority, increased uncertainty. The natural recourse for those trying to live healthy financial lives is to try to put by a nest egg to deal with that uncertainty. When you increase savings needs and income isn't rising to allow it, expect a pullback.
This can unbend and unkink, but there's considerable underlying weakness.
She has no love for Obama and the ACA.
It's disgusting. A lot of people had to defer treatment last year. A lot of people with insurance won't even go to the ER when they need to do so, now.