Malcolm Berko, a business columnist for The Columbian, occasionally recommends stocks to his loyal readers. Recently, a reader wrote to Berko, asking for his advice on when he should sell stocks he had purchased, which include: “Aetna, Centene, Molina Healthcare, WellCare Health Plans, Cigna, and Pfizer.” Berko responded, essentially recommending the reader hire a professional adviser in their area. In the second part of his response, Berko shed some light on the future changes he anticipates in the health care market.
Berko forecasts that health insurance premiums and overall costs are going to continue to rise over the coming years. He also highlights two (2) main changes he sees coming down the road. The first is he believes “insurance companies will have diminishing access to ACA’s reinsurance program, which permits insurers to bill the government for its costliest patients.” As a result, Congress will likely raise taxes and look to the private sector for cost sharing.
Second, Berko touches on risk corridor programs. “These programs guarantee that insurance company losses with be subsidized by us by transferring funds from lower-risk groups to high-risk groups. Again, Congress will be compelled to increase payroll taxes to cover these losses.” As the Affordable Care Act (ACA) keeps gaining momentum, and costs continue to rise, it will be important that private industry and Government work together towards a solution.
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