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Tuesday, April 07, 2015

More On That CES Mid-Year Update.

This is the release to which I refer:
 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.

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I'm sure a lot of those folks feel like I do: it seems that I don't have any money to spend on discretionary spending. The biggest chunk for me is property taxes.
The ACA is affecting healthcare providers as well. My daughter is a psychologist. Her practice has run about 25% people who pay out of pocket and 75% people with insurance coverage. She was seeing 30 people a week on average, which is about the maximum she can deal with and do each case justice. With higher copays and deductibles the number of people with insurance who are seeking her help has declined. She's seeing about 20 people a week now. The number of private pay clients has stayed about the same. She's getting fewer people with insurance. Her income has declined accordingly. She has no way of stimulating demand for her services. She has had to tighten her belt accordingly.

She has no love for Obama and the ACA.
Jimmy - that's bad, I admit, but at least a psychologist doesn't have to deal with referrals/authorizations to get people needed medical care. The struggle to get even the appropriate antibiotic, in some cases, is through the roof. You get paid a bit less, but compliance and overhead is through the roof.

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.
It's been interesting, dealing with my pulmonologist lately. He reauthorized a prescription for prednisone, then that info never made it to the pharmacy. He authorized oxygen and I didn't hear from anyone about it. Fortunately, I am feeling better but it makes you wonder. I turned down a second CT scan and a bronoscopy. The CT scans cost me $561 out of pocket and I have a $4800 yearly deductible on my insurance. I just can't afford those kinds of medical bills for something that he's already diagnosed and we know how to treat.
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