Let’s start with some supposed good news. The headline recently read Jobless rate is lowest in more than 7 years. It’s officially at 5.1%, compared to 10% in 2009. But dig deeper. If people who can only get part time work and other people on the fringes of the job market are excluded, the unemployment rate would be more around 10.3%. And I’ve seen other reports that the actual number would be even higher if all the people who used to work but simply gave up trying were included. Federal unemployment figures only include people who actively seek employment.
Next: Student debt seen as threat to economy. Student loans are now the second largest debt burden to Americans, only behind home mortgages. The total debt has grown by 76% just since 2009 to $1.2 trillion (yes, with a “T”). And student loan debt cannot be erased in bankruptcy cases. Why is student debt so high? Because states have markedly reduced their support for higher education each successive decade. Why? Because the percentage of state budgets devoted to healthcare has shot up from about 5% in the 1960s to about 40% today. There is no indication of that trend slowing down because …
Giving more people health insurance doesn’t save money. Obamacare was mostly an expansion of Medicaid, whose costs are shared between the feds and the states. Historically, the uninsured spend the least amount of healthcare dollars per person. The Medicare/Medicaid actuaries recently predicted that healthcare inflation is taking off again: about 5.5% for 2014, which is back to a more historical difference of about 3-4% higher than the general inflation rate. This same office also concluded that new Medicaid beneficiaries are costing more than expected. The Obama administration estimated they would cost $50 less, but they cost $1000 more. All this means states still have no relief from healthcare costs, so their support of higher education will continue to fall and student debt will continue to rise.
And what about the people who actually got Obamacare plans. I’m sure many have greater peace of mind and have had important healthcare concerns addressed since gaining coverage, but it comes at a price. With deductibles of up to $6,600 for singles and $13,200 for families, states and insurance companies are somewhat restraining premium growth, but the money has to come from somewhere. The Robert Wood Johnson Foundation reported that from 2013 to 2014, that patients share of their total costs grew by between 7.9% to 9.5%, much higher than the overall increase in healthcare costs.
The healthcare industry continues to suck the lifeblood out of all other sectors of American life. The millennial’s futures are becoming bleaker as their job prospects are becoming more limited with flat income growth at best, but their student loans are increasing at a much faster rate than even the inflation rate of healthcare.
Obamacare did nothing to significantly disrupt the status quo. Young people who want a brighter future should grow the courage to fight the scare tactics of the healthcare industry to give themselves a glimmer of hope that they might even approach the opportunities their parents had. It is an enormous task, but a necessary one.