Health Insurance Will Swallow Your Entire Paycheck in Three Decades
If health insurance premiums and national wages continue to grow at recent rates and the US health system makes no major structural changes, the average cost of a family health insurance premium will equal 50% of the household income by the year 2021, and surpass the average household income by the year 2033. If out-of-pocket costs are added to the premium costs, the 50% threshold is crossed by 2018 and exceeds household income by 2030.
Full study by Richard A. Young and Jennifer E. DeVoe. Thanks to Sarah Kliff for the pointer.
Scary.
More than scary.
You might add that Obama Care will only make things worse.
If spending increases in this manner, before it reaches 50 percent of their income, won’t a lot of people have an incentive to impoverish themselves (by working less etc.) in order to qualify for subsidized insurance in the health exchange — where premiums are limited to a percentage of income for lower income workers?
median household income: $50,000
Average group family premium: $14,000.
That’s a too big of a chunk to swallow right now!
Don Levit
It’s like I told college students at a class I spoke to last week… By the time I’m eligible for Medicare, we will all work and live at the hospital. That will be the only industry left after health care spending crowds out all other areas of consumption – including housing, transportation, etc.
Given a choice of starving today, because health insurance demands your whole salary, or foregoing insurance for a sickness you don’t currently have…, people will stop paying for insurance. The insurance economy and, in fact, the healthcare economy at large will self correct long before the scenario outlined in this excerpt.
The sky is not falling…. For certain, though, we can be sure the future will not resemble the current economic model.
The US is still the best country in the world to face these kind of problems. Ask someone in Greece how they plan to pay for their health insurance.