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California to Limit Health Care Cost Increases and What It Means to You Thumbnail

California to Limit Health Care Cost Increases and What It Means to You

A new regulation was approved by California regulators to limit annual price increases of doctors, hospitals and health insurance companies to 3% starting in 2029 according to a April 30, 2024 Associated Press article. 

The 3% cap will be phased in starting with a 3.5% cap in 2025. 

It was approved by a new state agency, the Office of Health Care Affordability Board. 

California’s health care industry says the cap is too low. 

In fact, the Center for Medicare and Medicaid Services said the increase this year will be 4.6% to practice medicine in the United States. 

Hospital worker’s salaries make up more than 50% of a hospital’s expenses. 

This will rise even more as new California law increases health care workers’ minimum wage goes up to $25 per hour this year.

What are the possible ramifications of this new regulation?

Well, we have no further to look than what has happened to California’s long-term care insurance companies and more recently to homeowners’ insurance companies.

Health insurance companies may choose to withdraw from California as homeowners’ insurance companies have done. 

This will cause chaos in the market place.

Hospitals may lay off staff to cut costs as fast-food companies are doing or even close their doors permanently. 

This will result in long waits and poor quality of care. 

Doctors will quit, retire, or move out-of-state. 

Hospitals, doctors and health insurance companies have to have more money coming in the front door than going out the back. 

My thought is this is a move to bring California politicians one-step closer to their long-time goal of a single payer health care system, the ultimate control of California residents. 

Read more about it here.

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