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Why The US Consumer Is About To be Crushed: The Obamacare Inflationary Deluge Arrives

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What's far worse for the troubled US consumer, this is just the beginning. Because after finally digesting the true cost of Obamacare, any recent insurance prime hikes will seem like a walk in the park compared to what is coming.

According to the WSJ, key insurers in some states are proposing hefty rate boosts for plans sold under the federal health law.

Case in point: 

  • In New Mexico, market leader Health Care Service Corp. is asking for an average jump of 51.6% in premiums for 2016.
  • In Tennessee, the biggest insurer BlueCross BlueShield of Tennessee, has requested an average 36.3% increase.
  •  In Maryland, market leader CareFirst BlueCross BlueShield wants to raise rates 30.4% across its products.
  • In Oregon, the largest insurer Moda Health seeks an average boost of around 25%.

All of them cite high medical costs incurred by people newly enrolled under the Affordable Care Act.

The irony is that while the Obama administration "can ask insurers seeking increases of 10% or more to explain themselves, but cannot force them to cut rates. Rates will become final by the fall."

Why the explosion in costs? Simple: take on look at the IBB or any other biotech index, all of which have exploded in recent years as a result of one key thing: pushing prices of medicines ever higher. Now, finally, these soaring prices which have likewise resulted in soaring stock prices, are about to be funded by everyone else.


Insurers say their proposed rates reflect the revenue they need to pay claims, now that they have had time to analyze their experience with the law’s requirement that they offer the same rates to everyone—regardless of medical history.


Health-cost growth has slowed to historic lows in recent years, a fact consumer groups are expected to bring up during rate-review debates. Insurers say they face significant pent-up demand for health care from the newly enrolled, including for expensive drugs.


“This year, health plans have a full year of claims data to understand the health needs of the [health insurance] exchange population, and these enrollees are generally older and often managing multiple chronic conditions,” said Clare Krusing, a spokeswoman for America’s Health Insurance Plans, an industry group. “Premiums reflect the rising cost of providing care to individuals and families, and the explosion in prescription and specialty drug prices is a significant factor.”


David Axene, a fellow at the Society of Actuaries, said some insurers were trying to catch up with the impact of drugs such as Sovaldi, a pricey pill that is first in a new generation of hepatitis C therapies.

Now Sovaldi has been great news for one group of consumers: those who were long the stock of drug maker Gilead. Alas, now the time has come to pay the piper. And while Sovaldi's cost at $1,000 per pill and $84,000 for a typical 12-week course of treatment, has been a goldmine for GILD, the piper's invoice will be massive.

Who pays it? Why everyone dear America. That's the magic of socialized medicine the Obamcare tax, which means everyone has to chip in for the healthcare of the few. Meanwhile, GILD shareholders are laughing all the way to the bank.

As a result, expect Obamacare premiums, which are about to spike across the board virtually everywhere, to become a key talking point:



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