The economy is booming, wage growth is not.
Healthcare is the big reason workers aren’t seeing higher wages – instead of spending their dollars on consumer goods, travel, cars and entertainment, workers are paying higher premiums and deductibles.
More than half of all workers have seen no increase in take home pay – ALL of their pay increases have gone to pay for higher health insurance premiums. And that’s before deductibles, copays, and co-insurance.
(graphs from WaPo)
Deductibles are zooming ever higher because high deductibles mean lower premiums. Think of this as cost-shifting to the sick; healthy folks pay lower premiums but if/when you need health care, BOOM!
You first have to pay for that care yourself, before you start getting some help from your healthplan.
This is even more of an issue for folks who work for smaller employers (<200 workers), where the average deductible for individuals (not families) is $2,069.
What does this mean for you?
You have less money in your paycheck because it is going to doctors, hospitals, pharma, device companies, and insurers.
And it’s going to get worse.
Thanks Joe. I believe that the more government gets out of the way the more prices drop. Prices would drop if a total free market was given the chance. Why can’t the government get out of the way and let the people negotiate prices on their healthcare? I do this with cash pay. I have a high insurance with an extremely high deductible (pretty much for CAT injury only) for my family of 7. Everywhere we go and every doctor or dentist or whoever we see we offer cash pay rather then our insurance and every single MD gives a 30-40% Discount. I wonder what a model would look like where only CAT insurance was mandatory at a low cheap price and the rest of the injuries or illnesses were cash pay? I know the progressive and left desire more government regulation and want the government to take care of all the problems in peoples lives but we keep forgettting the personal Responsibility (saving money, buying less of the wants and focusing on the needs.) You see people complain all the time about health care costs yet they own a tv, cable, cell phone, nice vehicles, take trips, etc. Don’t get me wrong I am not painting everyone with a broad brush as their are a lot of people who live pay check to paycheck and really struggle however is it the governments job to provide them with everything? I just see it totally opposite and many I asscoaiate with do as well. In fact a big group of friends and family were just talking about this last night. Thanks to your articles I brought up the topic of “Medicaid for all”. It is a slippery slope accepting socialized healthcare. It’s just another step closer to Socilaism (Venezuela). Any way you stick the fork into the power socket the result will be the same. We can’t do it better then the last country. Government take over one thing at a time until they own and regulate everything…Surely that has to cause some concern for every American that beleives in freedoms and less government regulation and government involvement. I would love to see everyone taken care of themselves if possible and if not then I would rather see people step up and help their neighbor….which I have seen happen frequently where I live. Utah is a great state where many pitch in and help others with their needs on a frequent basis. Maybe it is a pipe dream to see that on a national level. I hope you see where the other side is coming from. I get your side. People need help. We can do that now. We don’t need the government to step in and do it for us. We just need to focus more on helping others ourselves. And that’s my 2 cents. Thanks again Joe.
Hi Spencer – thanks as always for your thoughtful comment.
I’d suggest that Venezuela is a rare and unique example of really crappy government – which happens in every form of economy.
Look at Switzerland, Denmark, Norway, Sweden, Germany, Canada, Australia, New Zealand – healthcare costs are far lower than ours, and their people are healthier, live longer, and have fewer health issues.
I appreciate you bringing up Medicaid for All – and would encourage all to really dig into where single payer is today, what the real results are, and how much it costs.
The facts are compelling.
as to the “progressive and left desire more government regulation and want the government to take care of all the problems in peoples lives but we keep forgetting the personal Responsibility”, as one at that part of the political spectrum, that is NOT what I want, nor most of my fellow liberals.
Far from it.
We want the government to stop enabling big business by refusing to let CMS negotiate with pharma for drug costs. We wanted Sen Rubio to NOT defund small healthplans that would have been strong competitors to the big healthplans. We want government to stop telling women what they can and cannot do with their bodies. We want government to protect us from insurers trying to screw us by not covering pre-existing conditions, from polluters, from white collar crooks that brought on the recession…I can go on and on.
That is not happening now – in fact the opposite is.
Joe, Good morning. I have been following your Medicare/Medicaid for all and have some math questions. Hoping you can help. Do you know the annual cost to employers, employees and ACA members in terms of premium, deductibles, co-insurance and co-pay? There are numbers out there that are showing cost of $32 to $36T. Is the total cost of premium, deductibles, co-pay and co-insurance more or less than $3T per year currently?
Thanks for the question Jeff.
I don’t think the $32 – $36T figure is accurate – TOTAL US healthcare spend is about $3.3 trillion. So, total non-governmental cost is well under $3 trillion.
https://hctadvisor.com/2015/11/3-4-trillion-2016-us-healthcare-spending-category/