All eyes are on the US Supreme Court as the Affordable Care Act, better known as "Obamacare", is now currently under deliberation. The opening arguments started yesterday with more to come in the days ahead. Given the amount of coverage in the mainstream media in the last few days, one would think that the outcome of the court case would set the tone for the health care system going forward. The US Supreme Court is expected to make its final ruling on the ACA around June 2012 although it could occur any time between now and the November 2012 election.
There is a very strong case to be made that regardless of how the US Supreme Court rules on the ACA, that the future path of the US health care would lead to the same outcome in both cases -- the US health care system will collapse some time between 2015 and 2020. The US health care system is on an unsustainable path as a full blown insurance death spiral is now unfolding.
Back in September 2011, the implications of a full blown insurance death spiral were spelled out in an earlier blog entry in which the end result is a collapse of the health care system in 2017 when health insurance premiums for a family start to exceed the median household income. The previous evaluation was based on the Primary wave  down count. The current main count (complex structure for Supercycle wave (a) with Cycle wave x now unfolding) does not change the eventual outcome of the health care system, only the timing of the collapse.
Even if "Obamacare" were to be upheld by the US Supreme Court, the insurance death spiral will still unfold in full force. The vast ocean of money needed to provide subsidies to help people afford health insurance won't be available as the flow of tax dollars to the federal government will have substantially dried up (from current levels) by the time the subsidies and exchanges go into effect in 2014.
The key to the insurance death spiral is health insurance premiums relentlessly rising relative to wages, making coverage more and more unaffordable over time. Even now, there are 50 million Americans without health insurance with that number certain to keep growing in the future. An article published on Annals of Family Medicine makes a projection that health insurance premiums for a family will be equal to the median household income by 2033. The outlook depicted in the article is considered an optimistic outlook as it assumes that incomes will continue to rise in the future. The critical point will be reached much sooner than projected in the article because wage deflation (which has been unfolding since 2000) will accelerate the death spiral as people drop their coverage as premiums become more and more unaffordable. A combination of wage deflation and rising premiums will result in health insurance premiums for a family exceeding the median household income no later than 2020.
The insurance death spiral is starting to be recognized by a number of people. Even fewer people recognize the larger picture -- health insurance companies, hospitals, clinics, and pharmaceutical companies, are all connected together in which corporate greed in each sector plays its part in the larger US health care industry in which the cost of health care soars into the stratosphere and currently taking up 20% of the US GDP. The US healthcare system is also being characterized as an economic bubble as an excellent case for such characterization is made on "The Bubble Bubble" blog.
Death spirals and bubbles, despite their differences in how they are fueled, both ultimately end in a bust. The US health care system is on an unsustainable path and a collapse is in the near future regardless of how the US Supreme Court rules on "Obamacare" this year. When the health insurance companies collapse (when the death spiral goes bust), it will set off a chain reaction within the entire health care industry in which hospitals close their doors within 6 months, clinics close their doors within a year, and pharmaceutical companies close their doors within 18 months at the most. The chain reaction of events will bring about the collapse of the entire health care system.
A collapse of the current US health care system during the Grand Supercycle degree bear market is nature's way of purging one of the things that stands in the way of the future growth of the United States. There cannot be real and meaningful health care reform until the current health care system implodes as the health insurance companies and their lobbyists, as well as private hospitals and pharmaceutical companies and their lobbyists -- as it stands now -- have too much power and influence over government for meaningful reform to be possible. When the current US health care system implodes, the door will be open to rebuild the nation's health care system from the ground up without the hindering influence of corporate lobbyists.