With the economy still in a slump, the skyrocketing cost of health care places another burden on families already worried about paying the bills and finding jobs. But things don’t need to be this bad. Slowing the growth of health care costs would leave a hefty chunk of money in the bank accounts of families across the nation. Now, that’s something we all can appreciate.
A study published in this month’s issue of Health Affairs, found that between 1999 and 2009 the median monthly income for a family of four with job-based insurance increased by almost $1,910. However, 43% of that money, $802, went directly to a family’s higher health care payments, including higher premiums and out-of-pocket costs. Once you take into account the price increase for all goods and services over that decade, a family was only left with $95 in extra income to spend each month.
But, in an alternative universe, if we had slowed the growth of health care costs so that they grew at GDP plus 1% (a goal that economists think is totally attainable), this average family could have been left with a substantially larger chunk of change in 2009—$240 per month to be exact. That comes out to an extra $2,880 over the year. If health care costs had grown at the rate of inflation, the family would have had even more extra money to spend—$545 per month, or an extra $5,400 in 2009.
The rising cost of health care is a significant issue for families across the country. With so many families struggling to meet their bottom lines, skyrocketing health care costs are taking up an increasingly disproportionate share of incomes and leaving health coverage unaffordable for many.
There is a lot of work to be done to rein in our nation’s health care costs, but the Affordable Care Act takes the first important step: Making sure everyone has health care coverage. We all pay for the uninsured’s care through a hidden health care tax. If everyone is insured, health care costs for everyone will be lower. Further, in 2014, premium tax credits and cost-sharing subsidies will limit the percentage of income that families have to pay for health coverage. With these new protections, millions of American families will no longer have to worry about the cost of health care emptying their bank accounts.