Health Insurance is a Crisis We Can’t Ignore

12-11-24

Opening Comments

My last note was about the buffet dinner at Mar a Lago with Trump and his key lieutenants sitting next to me. I received a lot of favorable notes about the piece. It sure was an interesting evening. The most opened links were the video of the kid caught red-handed with chocolate all over and lied about it and the story about sensors that track inflammation in your body.

I only have a few sponsors as I have been extremely cautious of affiliating with brands unless I use them and believe in the product or service. As a result, I have turned down quite a few sponsorship opportunities in recent months. I agreed to be sponsored by Eight Sleep after using the high-tech mattress cover for a few weeks. Once I found my ideal setting of 68 degrees (while my wife’s side is set to 85 degrees), I noticed a significant improvement in my sleep quality. I have heard from dozens of readers who bought the Eight Sleep Pod and they have been thankful for the recommendation. There is a holiday special through 12/14 that gives you additional savings with the code: ROSEN for both Pod 4 or Pod 4 Ultra. The promo gives a discount of $250 for Pod 4 and $400 for Pod 4 Ultra. $600 is the total discount when adding our mattress and Sleep Essentials Bundle to the order. I have added 1.5 hours or more to my nightly sleep as a result of switching to Eight Sleep. The proof is in the pudding-look at my recent sleep results. I even set it up myself, and since I’m probably the worst handyman ever, that says a lot about how easy it is to install

• Video of the Day-The Kid Made From Rubber

• Health Insurance is a Crisis We Can’t Ignore

• Quick Bites

  • Markets

  • Grocery Prices By State

  • Europe’s Auto Manufacturing Issues

  • Google “Willow” Chip-WOW

  • Soto $765mm Contract

• Election

• Israel/Middle East

• Other Headlines

• Real Estate

  • Real Estate Migration Report

  • Motek Coming to Boca Raton

  • Florida “Condo Cliff”

  • Chicago High-End R/E Woes

  • Alexander Brothers Arrested

Video of the Day-Is The Kid Made Out of Rubber?

I have openly admitted my Facebook and Instagram Reels addiction. I uncovered the craziest dance video at a high school talent show. I do not know what this kid is made out of, but I presume he has no bones. I do not understand how anyone is able to move like this, and I would be hospitalized if I attempted these outrageous moves. Short video. Wait for the kid in the orange sweater.

Health Insurance is a Crisis We Can’t Ignore

One of the things I took for granted while working at JPM or running my hedge fund was the fact that I had high-quality healthcare. When you’re not with an organization anymore, finding your own healthcare can be a hassle—time-consuming, pricey, and not always the best quality. size. In Florida, it’s even tougher since only a few providers are willing to insure families unless they’re part of a fairly large company. I have spent hundreds of hours trying to get coverage. At one point, I had a policy through an administrator. The policy kept exploding in costs and the last quote was $4,800/month for awful coverage. I had 40% increases in costs year over year. We have no health issues in the family. A reader told me about his Obama Care experience and ended up paying $2,000/month for weak coverage.

This is a very brief survey on health insurance. I would appreciate if you would fill it out so I can learn about issues, as the insurance problem is bigger than I imagined. I will randomly select people who fill out the survey to receive a Rosen Report hat.

A reader sent me this link to a Peter Mallouk Tweet regarding the rising cost of healthcare. The average US family health insurance premium has increased from $6,000 in 2000 to $21,000 in 2022. That’s a 249% increase, or 5.8% per year, more than double inflation. The biggest beneficiaries of this massive increase in costs: health insurance companies. UnitedHealth (largest US insurer) is up 4,120% since 2000 vs. 340% gain for the S&P 500.

This WSJ article entitled, “Health Inflation’s Big Hike This Year, in Charts,” is exactly what I am talking about. The cost of employer health insurance rose this year (2023) at the fastest clip since 2011, according to an annual survey from KFF, a healthcare research nonprofit. The 7% jump in the cost of a family plan brought the average tab to nearly $24,000—more than the price for some small cars.

Looking at the cost of health insurance and prescription drugs combined with the quality of care, it’s clear: Houston, we have a problem. The Rosen family pays hundreds of dollars a month for prescription drugs despite having coverage. Check out charts outlining spend by country and health care rating. The US spends more than all the other major countries by every measure, yet the US healthcare system is ranked 21st. The US has the 2nd lowest life expectancy on the chart - only better than Hungary. The list of issues contributing to this is long, and I don’t profess to know all the answers (strong pharma lobby, the US has pharmacy benefit managers and other countries don’t, the US healthcare broker market is broken, and tort reform is needed).

As of 2022, the US is up to $13.5k/year on healthcare costs per capita, but other countries are not increasing at the same rate. According to Eurostat, the average expenditure per person for healthcare in the EU was €3.7k in 2022. We need a better solution to the US healthcare system. Despite our enormous spend per capita on healthcare, life expectancy in the US is less than other developed nations.

According to a 2021 study by the RAND Corporation, a non-profit global policy think tank, prices of prescription drugs in the U.S. are 2.5 times higher than the average prices of nine other nations (Austria, Australia, Belgium, Canada, Germany, Japan, Sweden, Switzerland, and the United Kingdom). That higher cost is largely related to brand-name drugs, which are 4.9 times more expensive in the U.S. than in those countries. In fact, brand-name drugs are responsible for 84 percent of total drug costs in the United States despite accounting for only 8 percent of drugs dispensed. As you can see below, Americans pay more than 10x the price of other countries on some drugs.

If you are moving to Florida and don’t work for a company, be sure you understand the alternatives for your family regarding health coverage, as options are limited, costs are high, and coverage is awful.

Quick Bites

• Stocks saw a slight pullback after an impressive run but rallied on Wednesday. Nvidia shares fell 3% after China opened an investigation over possible violation of antimonopoly law, and that helped push stocks lower on Monday. Bond yields increased with the 10-year Treasury yield of 4.23% after hitting 4.12% last week. Inflation came in at 2.7%, as expected, pushing the likelihood of a rate cut to almost 100%. The NFIB Small Business Optimism Index jumped 8 points to 201.7, the highest level since June 2021. After crossing $103k, Bitcoin pulled back to $101k. The Walmart recession signal is the WMT stock price divided by a luxury index and is shown in the 3nd chart. TSLA stock hit an all time high today of $420/share.

  

  

  

• I know inflation has come under control since the peak pandemic craziness. However, I feel so many things remain too expensive, and I am in shock when I go to the grocery store. Prices are insane. I went to Whole Foods the other day and the cost of milk, eggs, fresh fruit, and veggies was offensive. This chart outlines grocery spending by state. Visual Capitalist does a great job on charts and graphs.

  

• This is a good WSJ article, “Why Europe’s Vaunted Car Industry Is in Crisis, in Charts.” Europe’s carmakers used to rule the world. Now they are fighting battles on every front. At home, tougher emissions rules are forcing them to sell more electric vehicles, which are less profitable. In China, the rise of local competition is bringing the curtain down on a golden era for German brands. The latest threat is in the U.S., where President-elect Donald Trump champions tariffs. “We really are in a time of great disruption,” said Andrew Bergbaum, co-leader of the automotive practice at consulting firm AlixPartners. The turmoil is already leading to thousands of job losses and risks inflicting further damage on Europe’s economy, which has struggled to grow as fast as the U.S. in recent years. The automotive industry accounts for roughly 7% of gross domestic product in the European Union—far higher than stateside. Volkswagen, the region’s bellwether automaker, now trades close to 14-year lows. It is even holding talks with its powerful union about closing factories in Germany for the first time. On Sunday, Europe’s second-largest carmaker Stellantis said its hard-charging Chief Executive Officer Carlos Tavares would quit, amid mounting tensions with suppliers and politicians. Production costs have been rising, particularly in Germany, which lost its supply of cheap Russian gas amid the war in Ukraine. This year, the combined profit of VW, Mercedes-Benz and BMW is expected to fall by a third.

  

• The improvements in technology in my lifetime are mind-blowing. I did not have my first phone or computer until I was 27 years old. Now, everyone has a powerful device in the palm of their hand. Just when you thought things were fast, check out this statement: Google has unveiled a new chip that it claims takes five minutes to solve a problem that would currently take the world's fastest super computers ten septillion – or 10,000,000,000,000,000,000,000,000 years – to complete. Google says its new quantum chip, dubbed "Willow", incorporates key "breakthroughs" and "paves the way to a useful, large-scale quantum computer." Alphabet shares rose 5% after the “breakthrough” chip announcement.

  

• Juan Soto of the Yankees signed a $765mm deal over 15 years with the Mets. The deal includes an opt-out after five years and no deferred money, sources said. If Soto chooses not to opt out, his deal will go up $4 million per year -- from $51 million to $55 million -- for the remainder of the contract, meaning the total value could exceed $800 million. Soto is a great player and 26 years old, so he has a lot of baseball left relative to some other insane contracts for players in their 30s. However, I am not convinced a baseball player is worth that much money. This is a link to the worst baseball contracts of all time and interestingly, they look like pittance relative to the numbers in Soto’s contract. Only time will tell, but I struggle with the thought of paying someone so much money. One injury or a prolonged slump makes the contract a dud. The Mets guaranteed Soto $51mm/year. Stevie Cohn: I would be available for a bargain basement price of $25mm/year and I would make you a bet that my jersey sales would be the best on the team. Rosen with the number zero. Come on. I am 55 and in good shape. Steinbrenner bought the Yankees for $10mm in 1973. As a funny side note, former Met, Bobby Bonilla gets $1.2mm/year through 2035 despite being 61 years old today.

Election

• Trump names Andrew Ferguson as head of Federal Trade Commission to replace Lina Khan

  • He is currently an FTC commissioner and should lead to more M&A activity.

• The US gives more in aid to foreign countries than the next 9 countries combined.

  

• Biden says U.S. will support Syria and its neighbors after Assad dynasty collapses

  • Why?

• Former Secret Service Agent Warns Trump Likely To Be Attacked Before Inauguration

• Campaign finance records show Harris' $1 million payment to Oprah's production company

• Venezuelan national and Tren de Aragua gang member arrested in Trump’s backyard

Israel/Middle East

• Russian state news agencies say ousted Syrian leader Bashar Assad is in Moscow and given asylum

  • The initial reports of Assad’s plane missing were false.

• Israel PM helped to topple Assad, but it wasn't planned, analysts say

  • Israel destroyed all of Syria's remaining chemical weapons, missiles, air-defense systems, and air force, including Iranian military positions.

  • Israel strikes Syria 480 times and seizes territory as Netanyahu pledges to change face of the Middle East

• Saudi Arabia Appeals For Avoidance Of 'Chaos And Division' In Syria

• Bashar Al-Assad’s private fleet of luxury cars revealed as Syrians loot his palaces after dictator was forced to flee the country

• 'Catastrophic development' for Iran after rebel takeover of Syria

  • When I see the words “catastrophic and Iran” I get happy.

• Iron body presses and bed clamps: horrors of Syria’s ‘slaughterhouse’ prison emerge

• Yale students overwhelmingly pass divestment referendum

  

• Unhinged man dubbed ‘MackNazi’ terrorizing NYC, ripping down Israeli hostage posters

  • He is entitled to his view. No one should hire this guy, and wherever he works should be boycotted. He has been arrested MULTIPLE times and Bragg does nothing about his hate crimes that have become violent.

• Greta Thunberg bursts into laughter as she declares ‘f–k Israel’ at rally

  • Are her 15 minutes of fame up yet? Watch the video. Disgusting. Even more disturbing was the crowd cheering when she said, “F-CK Israel.”

Other Headlines

• Jefferies says small caps to top large stocks for the first time in 8 years

• Europe’s Population Crisis

  • Next year is the last year that Europe's population is set to grow, as it is expected to start declining in 2026. Great charts in this link. The ramifications of population decline while people live longer is dire.

    

• China consumer prices climb less than expected as economy slows amid trade war worries

  • Hard to trust any data out of China.

• Trump says he doesn’t plan to remove Fed Chairman Jerome Powell

• US Bitcoin ETF Inflows Near $10 Billion Since Trump Election Win

  

  

• Oracle shares slide on earnings and revenue miss (stock-8%)

• Court blocks Kroger’s $25 billion acquisition of grocery rival Albertsons

• We need a ‘Manhattan Project’ to beat China over rare-earth minerals

• Apple Tops the List of Best-Managed Companies of 2024

  • Others in the top 10 include:" Nvidia, Microsoft, Intel, Mastercard, Johnson & Johnson, Procter & Gamble, Alphabet, Adobe, and Phillip Morris.

• Treasury Department may fine small businesses $10,000 or more if they don’t file this new report

• Luigi Mangione charged with murder of UnitedHealthcare CEO Brian Thompson

  • Crazy story. Man was caught at a McDonald’s restaurant with a ghost gun, bullets, a silencer, and four fake IDs. He also had a manifesto that included quotes from the Unibomber. He is called “popular” and “well-educated.” This article suggests the shooter went crazy after his back surgery and called insurers “parasites.”

  • Insurance stocks have fallen since UnitedHealthcare CEO killing

    • UnitedHealth Group, CVS Health and Cigna are down more than 6% since the shooting.

  • Socialist UPenn professor hides social media after celebratory post about CEO murder suspect goes viral

• Daniel Penny found not guilty in chokehold death of Jordan Neely

  • Marine vet still faces criminally negligent homicide charge in death of Jordan Neely. Now NY BLM leader calling for “black vigilantes” and suggests attacking those “oppressing” them.

• ‘Defund the police’ activist goes viral after begging for help when everything she owned was stolen in San Francisco: ‘The cops didn’t do s—!’

  • I am sure getting a kick out of this story.

• Tren de Aragua spreads to one of America’s most remote states after member of brutal gang is busted there (NORTH DAKOTA)

• Self-made billionaire: You need to understand 3 things to lead a successful life—even ‘couch potatoes’ can use them

  • First, identify what you want. Second, figure out how to realistically achieve it. And third, pursue that path with ironclad determination.

• He bought a KFC store in Australia for $100,000 in 1969. Today, his fast food company is worth over $3 billion

• KC will pay $850,000 to firefighter who didn’t get a promotion because he’s white

• Jay-Z accused of sexually assaulting 13-year-old in 2000 incident along with Sean ‘Diddy’ Combs

• Sweden mulling social media age limit to stop gangs recruiting young people

• Could Dark Chocolate Reduce Your Risk of Diabetes?

• American women don’t want to look like the Kardashians anymore — plastic surgery trends show mass ‘deflation’

  • The article suggests a move away from the exaggerated looks of the Kardashians and to more natural looks. They are dubbing it the “De-Kardashian-ification of America.”

• College enrollment is falling at a ‘concerning’ rate, new data reveals

  • I don’t feel this article covers all the reasons as it largely cites declining birth rates. Cost of education, woke teaching agendas, lack of jobs, vocational alternatives, and many other factors are contributing to the decline.

• For every Republican on the faculty at the top-ranked liberal arts college in America (Williams) there are 132 Democrats.

  

• Google Chrome users warned to never click on these websites — 8 telltale signs of a scam and tips to avoid

• Le Cafe Louis Vuitton blows every designer retail restaurant out of the water

• How Did Taylor Swift Fans Juice the Economy? We Tracked One Friend Group’s Spending

  • The WSJ article goes into great detail on spending for clothes, hair and makeup, hotels, food, parking, tickets… Seems they got off cheap to me. When my wife and daughter went to Tampa for the Swift show, it cost a total of over $4,000 for two with horrible tickets that cost $1,400 each. Now that the 149-date tour across 5 continents is over, the NYT estimates $2.1bn in ticket sales (almost double the next highest-grossing tour). Over 10mm Swifties attended concerts. Then consider all that was spent at the shows with clothing and accessories, food, and drink. Swift gave $197mm in bonuses to her crew.

    

• If you own a Dodge Ram you are 75x more likely to have a DUI than a Toyota Sienna owner

  

• Top-Gun Navy Pilots Fly at the Extremes. Their Brains May Suffer.

• The $20-Trillion Tunnel That Could Link New York and London

• China unveils all-terrain SPHERICAL robocops to chase down, bludgeon & catch criminals using net-launching cannons (Impressive video)

• Hundreds of Vials of Deadly Viruses Missing After Lab Breach

• Modern-day witchcraft is on the rise in Australia as support for organized religion plummets

• Traffic chaos caused by 30K pounds of melted chocolate on Bay Area highway

  • Is there a supreme being? How can there be if this incident happened without me? Burning chocolate? Sounds like a dream to me.

Real Estate

• The National Association of Realtors released the 2024 Migration Trends report last month. With rapidly changing buyer preferences and abilities, there has been a lot of migration within the United States over the past few years. Southern states such as Florida, Texas, and the Carolinas have been big winners in these domestic migration patterns, largely led by more affordable conditions and opportunities. According to U.S. Census Bureau, 42% of these moves were driven by housing reasons, 26% for family reasons, 16% for employment reasons, and only 1% moved due to climate-related reasons. There are dozens of charts in the link. The quality of life, cost of living, taxes, weather, and pro-business policies are just too good in South Florida. However, rising housing costs and challenging school admissions have made the move more complicated.

  

  

• I write extensively about food and restaurants. South Florida continues to improve its food game and Miami is now legit, while Palm Beach has a long way to go. Boca and Delray are picking up serious steam with recent additions. I have not been more excited about a restaurant opening in Boca Raton than I am right now. Motek is opening in Boca in early 2025. If you recall, I did a full write up on Motek in September of 2024 and their multiple locations in Miami. They will be minutes away from me in Boca in months. Money brings in restaurants, and the inflow of wealth to South Florida has been stunning. Motek, I’m so excited and thrilled that I won’t need to head to Miami to get it. It will be my favorite restaurant in Boca when it opens.

  

  

• I have written extensively about the Florida condo market and my concerns about older buildings. This CNBC article, “A Florida ‘condo cliff’ is coming as owners deal with fallout from 2021 Surfside collapse,” is worth a read. I liken the situation to the NYC co-op vs condo debate. Condos trade at a big premium for a reason. The same is true in Florida of the premium for a newer condo vs an older one. I would proceed very carefully before purchasing an old condo. After the deadly collapse of a 12-story condominium tower in the Surfside suburb of Miami, Florida, in 2021, state lawmakers implemented new requirements for older condominiums. Buildings that are at least 30 years old, as was the Champlain tower that fell, have to undergo special inspections, make repairs and gather reserve funds for future maintenance. The deadline is at the end of this month. Roughly 1 million units are subject to the new capital-intensive rules. Some owners are hoping to sell their units rather than comply, others are walking away, and still others are looking to investors to bail them out. Longtime analyst Peter Zalewski, founder of Miami-based real estate consultancy Condo Vultures, calls it the condo cliff. “I would compare it to what we saw in during the Great Recession, which is effectively zombie buildings.

• This is a good WSJ article, “It’s Not Just Ken Griffin. Rich Chicago Residents Are Losing Their Shirts on Real Estate.” At Art Basel Miami, I bumped into a good friend and RR reader who recently sold his amazing house in Chicago after being on the market for years. He is looking at co-ops on Lake Shore Drive in the $100-200/ft range. HOW IS THAT POSSIBLE? Yes, they need work, but $100-200/ft is crazy. The cost of AWFUL policies has pushed many companies and business people out of the once great city. I spoke with someone who lives at 900 N Michigan Avenue who bought a condo for $500/ft. He is buying an EV because “getting gas is too dangerous in Chicago.” Ken Griffin made it clear to city and state leaders that if they didn’t address the crime issue, he would leave – and he followed through on that promise. Turns out he sold his PH at a 44% loss to JB Pritzker, the Progressive Governor of Illinois who seems to love crime. Chicago’s luxury real-estate market has seen a precipitous drop in recent years. In the third quarter, there were 28 Chicago home sales of $4 million or more, plummeting 28% from 39 in the same period of 2021, according to data from BrokerMetrics. The median price of those sales was $4.625 million, down from $5 million in 2021’s third quarter. “The high-end downtown luxury market has definitely taken a big hit,” said Nancy Tassone of Jameson Sotheby’s International Realty, who worked on the Griffin purchase and sale. “Once [the social unrest] happened, we couldn’t recover from it.” Overall crime in the city has climbed 36% year-to-date compared with the same period 2020, thanks in large part to major spikes in theft and carjackings. Here is an idea for Chicago an other idiotic cities: Have consequences for crime. Put the bad guys in jail. Be more pro-business. Fewer regulations. Use the high taxes to improve the city and remember that the wealthiest residents always have other options.

• The once high-flying Alexander brothers have been arrested in Florida after accusations by numerous women of sexual assaults. Two brothers were major real estate brokers in Miami. Police and FBI were spotted outside Oren’s home in Miami Beach. This is a huge fall from grace and it will be interesting to see how this plays out in both civil and criminal courts.

© 2024 The Rosen Report LLC. All rights reserved. Does not constitute investment, financial, legal, or tax advice. Consult with your lawyers and professional financial advisers. Rosen Report™ #742 ©Copyright 2024 Written By Eric Rosen.