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Government Shutdown and Obamacare

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With the government shut down, it is time to take another look at the stated sticking point to restarting the government – medical costs (aka Obamacare).

I preferred to get some graphs for this post from the BEA. Here is the response from their website:

So today’s post will be less graphical than I like.

Anyway, medical costs are rising – I have documented the situation in Health Care Cost Slowing – Blame It on Obamacare.  My position is that Obamacare will be good for some and bad for others. Only a fool stands in front of an oncoming train complaining about its noise.  Each person, each economic segment needs to determine the effect of Obamacare – and needs to create his/their own workaround if negatively affected. So much the better if Obamacare benefits you.

I am a boomer – but not yet 65.  I pay for my own medical insurance, and have done so since 1995. It is a special global medical insurance issued by a USA provider which is valid not only in the USA – but around the world. It has certain eligibility requirements which would make it suitable for only a small proportion of USA residents.

Which leads me to the top 10 destinations for medical tourism from the USA according to Patients Beyond Borders.

  1. Brazil
  2. Costa Rica
  3. India
  4. Korea
  5. Malaysia
  6. Mexico
  7. Singapore
  8. Taiwan
  9. Thailand
  10. Turkey

Depending on the destination and the procedure, the savings range from 25% to 90% of the USA prices.  There is no reason to go through any agency in booking overseas medical procedures – as a simple internet search as well as patient comments are all available on line. To get a feel of the standing of these and other countries in comparison to the USA:

Table 1 – Per Capita Purchasing Power Parity for medical costs

WHO Rankings Country PPP per Capita % GDP
1 United States 7,960 17.6
8 Canada 4,314 11.4
9 Austria 4,288 11.0
10 Germany 4,219 11.7
11 France 3,969 11.9
12 Belgium 3,948 10.8
13 Ireland 3,761 9.4
14 Sweden 3,722 10.0
15 Iceland 3,577 9.8
16 Australia 3,484 8.7
17 United Kingdom 3,438 9.8
21 Italy 3,071 9.4
22 Spain 3,067 9.6
23 Greece 3,054 10.6
32 Singapore 2,111 4.1
38 Korea, South 1,879 6.9
56 Costa Rica 1,155 10.5
61 Russia 1,043 5.6
65 Turkey 957 6.7
68 Mexico 922 6.5
69 Brazil 921 8.8
85 Malaysia 629 4.6
111 China 347 5.1
114 Thailand 327 4.2
148 India 124 4.2

I have lived over 20 years in 6 of the above listed medical tourism countries, and utilized their health care systems. I have friends who have gone under the knife there – from keyhole surgeries, to heart bypass, to hip replacement, to cancer treatments -to name a few.  Most believed they received good to superior treatment.

Unfortunately, only retirees and people in special circumstances can take advantage of medical tourism – leaving the majority twisting in the wind with rising medical costs. Nothing seen to date reduces the total costs of medical care for Americans. Sorry, there is no Santa Claus.

I continue to ask – why cannot either political party see that it is the costs of health care on the middle class which is the real problem? Shutting a government down over philosophical differences about the methods for delivery of health care is provided is myopic. Neither party is offering or negotiating any concepts for lowering health care costs.

Other Economic News this Week:

The Econintersect economic forecast for October 2013 again improved and it appears an improving cycle has begun. There is no indication the cycle is particularly strong, as our concern remains that consumers are spending a historically high amount of their income, and the rate of gain on the points we watch are not very strong.

The ECRI WLI growth index value has been weakly in positive territory for over four months – but in a noticeable improvement trend. The index is indicating the economy six month from today will be slightly better than it is today.

Current ECRI WLI Growth Index

/images/z weekly_indexes.PNG

Initial unemployment claims went from 308,000 (reported last week) to 374,000 this week. Historically, claims exceeding 400,000 per week usually occur when employment gains are less than the workforce growth, resulting in an increasing unemployment rate.

The real gauge – the 4 week moving average – degraded from 305,000 (reported last week) to 325,000. Because of the noise (week-to-week movements from abnormal events AND the backward revisions to previous weeks releases), the 4-week average remains the reliable gauge.

Weekly Initial Unemployment Claims – 4 Week Average – Seasonally Adjusted – 2011 (red line), 2012 (green line), 2013 (blue line)

/images/z unemployment.PNG

Bankruptcies this Week: Cengage Learning

Data released this week which contained economically intuitive components (forward looking) were:

All other data released this week either does not have enough historical correlation to the economy to be considered intuitive, or is simply a coincident indicator to the economy.

Weekly Economic Release Scorecard:

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One Response to Government Shutdown and Obamacare

  1. AllenShaw says:

    “I continue to ask – why cannot either political party see that it is the costs of health care on the middle class which is the real problem? Shutting a government down over philosophical differences about the methods for delivery of health care is provided is myopic. Neither party is offering or negotiating any concepts for lowering health care costs.”
    Other Economic News this Week:
    Why can’t we understand that the Affordable Care Act is not about saving individuals money, it is about adding those who have not had assistance to the insured rolls.  Some people are going to pay more, however the overall good will be achieved. Cost savings will come automatically when new methods are devised to accomadate the newly insured.