Five Ways to Protect Your No. 1 Asset

Editor's note: Knowing how to navigate health care in America can give you a critical edge... whether you're seeking care, managing your medical plan, or investing in the space. That's why we're excited to share an important essay from our friend Tom Carroll at our sister company Stansberry Research. In it, he explains the sector's […] Not rendering correctly? View this e-mail as a web page [here](. [Empire Financial Daily] Editor's note: Knowing how to navigate health care in America can give you a critical edge... whether you're seeking care, managing your medical plan, or investing in the space. That's why we're excited to share an important essay from our friend Tom Carroll at our sister company Stansberry Research. In it, he explains the sector's frustrations, dangers, and incredible wealth-building potential... --------------------------------------------------------------- Five Ways to Protect Your No. 1 Asset By Tom Carroll --------------------------------------------------------------- [NOW is the Moment You've Been Waiting For]( On August 29, a historic unveiling in Houston, Texas could reshape the stock market and create a wave of millionaires on a single investment. [Learn more here until Midnight tonight (includes free stock ticker.)]( --------------------------------------------------------------- Today, more than ever, please accept the simple fact that your health is your most important asset... It needs to be managed just like anything else. That doesn't just mean eating right, exercising, and not smoking or drinking excessively. It also means understanding the rules of the playing field. You need to appreciate the structure of our massively complicated system... Why? Because it is the one part of the economy in which we are all customers. The "product" you must purchase could mean the difference between living with a chronic illness or understanding how to fix yourself. It could mean personal bankruptcy... or knowing how to avoid irrational costs. Understanding it may even mean the difference between life and death. That's why back in February 2020, I gave a presentation called "The Five Things to Do Today to Make You a Better Health Care Consumer." I've given the presentation before and it's always a crowd-pleaser. That's not because I'm a great speaker. It's because the information is so valuable... It sheds light on a topic that most people just don't understand. Today, I'll share the tips from that presentation. First up, understand the health care dollar... We all need a better understanding of where our dollars go. The average family of four spent more than $28,000 on health care in 2019 – and that was before COVID-19. Where does it go? Insurance companies? Drugmakers? Doctors? You might be surprised to hear the biggest piece of the health care pie: hospitals. Between inpatient and outpatient care, these important institutions account for about 50% of total health care spending every year. If we do not address this major driver of costs, it will be very difficult to lower annual health care inflation. Next, stay out of the hospital unless absolutely necessary... Besides being expensive, hospitals are also dangerous places to be. If you are admitted to a hospital, I guarantee your final bill will meet and likely exceed whatever deductible your insurance carries (regardless of services rendered). If you're uninsured, expect to pay full retail price – thousands more than what an insurance company would have to pay. But why are they dangerous? Simple – hospitals are where all the sickest people are. Despite best efforts, it's difficult to keep bacteria and viruses at bay within hospitals. Hospital-acquired infections afflict 1.7 million people annually and kill 99,000 of them. That is almost a 6% mortality rate. Moreover, physicians and other clinicians are humans – they make mistakes. A 2016 study found that every year, between 250,000 and 440,000 deaths are directly related to a provider mistake. This makes physician error the third leading cause of death in the U.S. And the pandemic has layered more risk on top of all this. I'm being very critical of hospitals. The truth is – if you really need to go to the ER, it's likely that in your gut you know that's the right thing to do. But it's a good idea to avoid the hospital whenever possible. I argue against hospital use for primary care services. Urgent care facilities can handle many issues if you don't have a regular doctor... And of course, this is all the more reason to take preventive care seriously. Three, once you reach the glorious age of 65, you become eligible for Medicare... This is the health care program you've paid for all your life through taxes. Now you get to collect the benefits. People that reach age 65 and become eligible for Medicare can expect to live for 21 more years. Interestingly, Medicare will cover about 65% of your expected health care spending during those 21 years. The other 35% is on you. How much will that be? You better know – because it's a lot. It needs to be part of your retirement planning. If not, your plans may need to be revised when it's too late. On average, people on Medicare for those 21 expected years will spend about $200,000 of their own money on health care. An alternative is to consider the Medicare Advantage ("MA") program. This is a very successful partnership between the government and private-sector health care companies. This is a way to get all your Medicare benefits plus others not included in Medicare for much less. Don't take my word for it. About 40% of the Medicare population gets their benefits this way today. And that level has been rising for the last 10 years. On average, using an MA plan will cost $130,000 out of your pocket during those 21 years. Wouldn't you rather spend $70,000 on something else? --------------------------------------------------------------- Recommended Link: [This could literally save your retirement]( The man CNBC called "The Prophet" says he'd put 50% of his kid's college fund in this stock. [He reveals the name and the ticker symbol here](... --------------------------------------------------------------- Fourth on the list: Don't be spooked by health care reform... More and more, health care is becoming a major deciding factor in elections... The COVID-19 pandemic has crystallized its importance. While the U.S. health system needs reform, there is nothing on the horizon that suggests major changes. That is good for investors, as uncertainty about the government changing the rules is not good for health care stocks. There will, however, be some tweaks. What do I expect? Overall, the most likely scenario will march the U.S. toward a deeper version of the Affordable Care Act ("ACA"). We'll likely see ideas added to the ACA structure focused on strengthening the health care backbone against future pandemics. (Mark my words – what we're seeing with COVID-19 will happen again.) I know what you're thinking... Despite being one of the most politicized and polarizing laws ever passed, it's actually a good baseline to start from. Over time, it will be strengthened... Its original problems will be solved. If supported, the ACA might be a major step toward universal health care delivered by private-sector entrepreneurs. You might not like the sound of that... But don't worry or get worked up over it. Life is too short. Instead, keep in mind that reform efforts will take years. They usually lead to a better system over time. And ultimately, everyone will benefit, especially society as a whole. Finally, don't hate your HMO, invest in it... From 1966 to 2016, health insurance premiums rose 10.7% annually, on average. This is more than the S&P 500 Index returned over this time period (9.7%). Wouldn't it be great to somehow invest in this? We can. You see, health insurance companies are the middlemen that reflect these cost increases. They are the companies and government agencies that pay the hospitals, doctors, pharmacies, and other providers of care. These companies consolidate all health care spending into a single price paid for all services. Their revenue must grow by the same rate as underlying costs. Otherwise, they will go out of business. If health care costs are expected to rise 9% in the coming year, a large health insurer will set its premiums to rise by at least that same amount. Said differently, these companies have a built-in price inflator that has averaged over 10% for 50 years. For you small business owners, wouldn't it be great to raise your prices every year by this amount? As a health care analyst, this idea was the central focus of my investment thesis for health insurance companies. It has held up for more than 20 years since these companies evolved into the modern-day players they are today. These stocks have been some of the best-performing investments in health care. We are currently in what I call the "Platinum Age of Health Care." The pandemic launched new health care tech, therapies, and interventions. It also accelerated existing technologies that already existed – like telemedicine. The private sector will put these new approaches in place in coming years. If we're all better educated, we can influence how this very important system is shaped. If not, the government will reshape it for us. And that will not be the best possible outcome. So take the time to learn as much as you can so you can protect your most valuable asset – your health. It will save you frustration. It may save you a lot of money. It will support your investment goals. It may also save your life. Regards, Tom Carroll July 25, 2022 Editor's note: Health care makes up nearly 20% of the U.S. economy. And at $4.1 trillion, it's not just bigger than every penny spent nationwide on food, cars, or energy... It's nearly the size of all three put together. Now, health care is entering a new age. COVID-19 has kicked innovation into high gear. And even the smallest changes we're about to see could be worth billions... in a sector that's already an incredible hedge against both inflation and recession. Our friends at Stansberry Research recently shared how to harness this growth potential, while protecting your wealth in what might be the most ironclad sector in the world. 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