The average cost for a family’s health insurance coverage this year is $12,106. That amounts to just over a quarter of gross median household income ($46,326). (a ‘household’ is defined as two or more individuals).
Lets put that in context.
Basic living expenses (apartment, basic food, transportation, ranged from $27,264 (Casper, WY) to $57,552 (Boston, MA) (2004 numbers). That does not include the cost of health insurance and out of pocket health care expenses, but covers pretty much everything else needed to exist, and nothing more – no widescreen TVs or trips to Disney or second cars.
The cost of health insurance is equivalent to 43% of living expenses in Wyoming or 21% in Boston.
Are we unaffordable yet?
The article indicates that the worker pays $3,281.00.
Why the need to mislead?
Aubrey – there is no misleading. reread the post – it is pretty simple. I am pointing out the cost of health insurance relative to income. Some folks have partially employer-paid coverage, many do not. That is beside the point of the post.
Joe
This article doesn’t address the medical inflation factor which is one of the primary drivers for insurance premium increases. Unless medical inflation is brought under control, no national universal scheme will “save money”. Premiums or taxes, it’s all money out of my pocket. So far, CMS’s only response to medical inflation is to cut reimbursements to healthcare providers. This is putting strain on the fixed costs (which face inflaction factors of their own) of providers and not addressing how to control utilization through outcomes. Cutting reimbursements will only continue to force physicians (especially PCPs) to drop Medicare participation. Then the costs will REALLY go up.
Based on the experience in Western Europe, Canada and elsewhere, the most promising way to control medical costs is through a combination of global budgets, especially for hospitals, and explicit rationing in the form of restrictions on supply (MRI machines, new hospitals and expansions of existing hospitals, etc.) and withholding of medical interventions based on age and/or QALY metrics. I doubt that the U.S. population is ready to embrace any of these strategies yet. I do think it would be helpful if the actual cost of health insurance, whether it’s nominally paid for by employers or employees or we move to taxpayer financing, is a visible and transparent as possible. That is why my preferred taxpayer financing mechanism would be a payroll tax, a dedicated VAT, or some combination of the two. If it’s a payroll tax, there should also be a dollar for dollar credit for the employee’s share of health insurance and FICA taxes toward the taxpayer’s income tax liability. The EITC could be adjusted to protect the working poor.
To further put it in context, $12,106 is about what a minimum wage worker would earn in a year working full-time.
Unfortunately, they’re probably not in the group with employer-subsidized insurance and only paying $3,281. And in many states, they wouldn’t be “poor enough” for Medicaid.
I think costs are a bigger political problem than access. The candidate who can make a credible case for being able to reduce costs would probably be very popular. The electorate is mostly middle class. A suffering minimum-wage earner is not going to matter to much of the electorate. Nor will a “lots of choice” argument. What middle class Americans really want in this space, I think, is certainty of affordability.