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Second Half Of The Year Setting Up For A Colossal Fall

I just got out of a three hour marathon on Obamacare.

Ladies. Gentlemen. This does not look good.

We’re looking at an across the board tax increase on all existing health plans of 8-10% before cost trend. Medical trend has been running at a hot and steady 8-10% annually by itself.

So right now, before we even start factoring in things like losses from disruption or penalties for non-compliance (which can be incurred by any number of things at the administrative level in a corporation), companies in the US running an insured plan through one of the medical carriers is bound to see a 16-20% increase in the cost of their health plan. Minimum.

How much of that can even be passed along to employees (which they are bound to try)?

I don’t see anyone who’s going to escape this. Large corporations tend to self fund their benefits, so they will continue to see whatever their costs are – but everyone gets hit a little bit. And since the base of small businesses in the country are about to get railed, how do you think that will affect the business climate in this country? Being big doesn’t help you if your consumers are getting clobbered. Hell, it actually guarantees you get some of the pain.

I can tell you right now I will not be running long into the second half of this year. Between this, the pension gap funding window closing, and all the typical stupidity you expect to see throughout the summer anyway…you’re mad if you don’t have a sizable cash position by the end of May.

This is me warning you. Consider yourself warned.

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