Americans now spend twice as much on health care as they did in the 1980s
The average American household spent almost $5,000 per person on health care last year.
That’s a 101% increase from the roughly $2,500 per person that Americans spent about 34 years ago in 1984, according to an analysis of the Bureau of Labor Statistics Consumer Expenditures Survey by data company Clever. To make accurate comparisons, Clever adjusted all dollar amounts for inflation.
It’s perhaps not surprising that health care expenses have risen over the past three decades. But the main driver of the increase is not drug costs or medical services. In fact, the costs related to medical services have decreased by about a third since the 1980s.
The biggest reason for the increase is insurance costs, which have grown by 740% since 1984, Clever calculates. The average American paid about $3,400 for insurance alone in 2018.
It’s worth noting that Clever’s analysis looks at the average cost of health care across all Americans, no matter how they get their coverage. But over half of Americans rely on their employer for health insurance, so typically employees do not pay the full cost.
Individuals who rely on employer-based insurance benefits are paying an average of $1,242 in out-of-pocket costs, according to Kaiser Family Foundation’s annual employer benefits survey. Overall, the average premium for a single American is about $7,188 for 2019, with employers carrying a significantly larger portion of the overall expense.
Employer-based insurance for families costs about $20,576 this year, about a 5% increase from last year. Yet families are still on the hook for an average of $6,015 in out-of-pocket expenses, which is about a 71% increase over the past 10 years.
These increases in insurance premiums have actually outpaced wages, which grew by about 3.4% over the past year and 26% over the past decade, according to Kaiser. Experts agree that wages are not keeping pace with the rising costs of health care.
“There is growing evidence that cost protections have eroded for those who have employer-sponsored health coverage, putting the burden of health care costs on workers and their families,” says David Blumenthal, president of the health care policy foundation The Commonwealth Fund.
The burden that health care expenses place on many Americans has prompted several politicians, including Democratic presidential candidates Senators Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) to propose all-encompassing “Medicare for All” plans that aim to eliminate out-of-pocket costs.
Yet it’s difficult to predict exactly how much Americans would pay with a Medicare for All plan. On the surface, the average person currently spends less on out-of-pocket costs when using a private, employer-based insurance than Medicare. But Medicare currently serves a predominantly elderly population who typically require more health care and therefore spend more.
Beyond the uncertainty around what a dramatic overhaul would mean for Americans’ health care options, critics and even supporters of the Medicare for All proposals also question how the country would pay for such a system.
“Medicare for All would require a major change in the way in which health coverage and care is organized and financed in the U.S.,” Tricia Neuman, director of Kaiser’s program on Medicare policy, said during a testimony in front of Congress earlier this year.
[“source=cnbc”]
