Grind for October 7th, 2018
“I like large parties. They’re so intimate. At small parties there isn’t any privacy.”
– F. Scott Fitzgerald (The Great Gatsby)
Employee sponsored health insurance nears $20,000
As health insurance costs continue to rise, the average annual premium for a family plan offered by employers rose 5% to reach $19,616 this year.
In many cases, employers increased deductibles that employees must pay to help mitigate the premium increases.
“The burden keeps growing on the employees and the employer, said Debbie LeMaster, human-resources manager for a landscaping company in Virginia. This year, the company upped the deductible on its most popular healthcare plan from $3,000 to $4,000.
According to a survey by the nonprofit Kaiser Family Foundation, American workers in 2018 paid on average $5,547 per year for a family plan (about 29% of the premiums).
Individual healthcare plans increased 3% from last year to reach an average of $6,896, with employees shelling out 18% of the premiums.
At the same time, wages increased 2.5% and inflation increased 2.5%.
Research has linked rising costs to higher prices from providers and to mergers that bring systems of hospitals together.
“Historically, healthcare providers have consolidated,”explains Harvard economist Michael Chernew. “That increases their market power, and they increase their prices.”
Research suggests that doctor’s prices increase by as much as 14% after they become part of hospital systems.
Honda is partnering with General Motors to develop a driverless car
Honda this week announced plans to invest $750 million in GM’s self-driving car (the “Cruise”), with plans to commit an additional $2 billion over the next 12 years. Honda will receive a 5.7% stake in the project as a result.
News of Honda’s investment sent GM shares up 3.3% on Wednesday.
“This is a partnership that has a running start to it and will allow us to move very quickly,” said GM President Dan Ammann.
Honda’s investment follows a previous investment of $2.2 billion by SoftBank Group (for a 19.6% stake in the project), bringing GM’s post-money valuation to $14.6 billion.
The two investments – both from Japanese companies – will give GM the room it needs to develop the Cruise without borrowing capital from its traditional business.
Honda’s investment also represents a big change for the company, which has long valued its engineering know-how and has avoided technology developed by other companies.
As The Wall Street Journal points out, the unlikely partnership between GM and Honda “is among the first sigs that traditional automakers could join forces with one another as they try to fend off Waymo – formerly Google’s autonomous vehicle program, and others vying to lead in a technology that could upend the transportation sector.”
In the meantime, GM plans to introduce a driverless taxi service in an undisclosed US city sometime next year.
GOOD TO THE LAST DROP:
Did you know… Daydreamers are better at solving complex problems.