How high costs hurt you
Americans shoulder a heavy financial burden for their health care.
Americans pay for health care through insurance plans (either directly or through foregone wages in employer based plans), through taxes, and, what hits closest to home, out-of-pocket. Family incomes for the vast majority of Americans have been stagnant for decades, growing
only 0.2% per year since the 1970s. Flat wages and continually rising health care costs are a recipe for frustration and anger.
Overall, our spending on health care has skyrocketed in the last 40 years:
For the U.S. overall, that’s an increase of about $2.5 trillion.
Because of the rise in health care costs,
43% of Americans say they have trouble paying for their deductibles and premiums, and
29% say they struggle to pay their medical bills.
1975, the average personal health expenditure was $514.
How fast have premiums been rising?
Average annual premiums – the amount an individual or a family pays for their insurance plan – have increased significantly. In 2016, it costs $6,400 for individual coverage per year, and $18,000 for a family. This is an increase of 3% since 2015, 20% since 2011, and 58% since 2006.
How much are deductibles costing Americans?
average deductible for Americans with employer-sponsored health insurance was around $1,500 in 2016.
The percentage of Americans with deductibles increased by
28% in the past 10 years. Furthermore, the
average deductible has grown from $600 in 2006 to $1,500 in 2016. This mostly reflects the greater usage of high deductible plans,
whose enrollment has increased seven-fold in the last decade. These plans require families to pay on average $2,000 for an individual and $4,300 for a family before any benefits kick in. For families with incomes over $100,000 and savings of several hundred thousand dollars, these schemes can be affordable, but the median household income in the United States was only
$57,617 in 2016, and about
60% of Americans have less than $1,000 in available savings that can be used in an emergency.
What is the effect of high deductible plans?
By forcing people to pay expensive out-of-pocket costs for health care before insurance kicks in,
many Americans skip visiting their doctor, which delays treatment, and can result in higher costs and worse health outcomes later on.
How bad are money troubles for older folks?
As people age, their various ailments make many unable to live independently – at home or with only “assisted living.” The cost of nursing home care is a major threat to family resources. One in three Americans over 65 will require nursing home care. In 2016, nursing home care costs averaged $82,000 per year, which is three times the annual income of most seniors. When people first enter nursing homes, about 40% of residents pay with private sources (private insurance or out-of-pocket savings), with the remaining using either Medicare (37%) or Medicaid (35%). But very quickly saved wealth gets all used up, short-term Medicare coverage ends, and Medicaid takes over, covering 60% of nursing home fees.