I got a look at a benefits statement for a 40-year-old worker at a large Boston-area employer. This worker has a medical and dental plan that covers a family of two adults and one child. The deductibles are low, which makes these costs a good estimate of the total expected cost of health care for this family. Massachusetts already has a universal coverage system almost identical to the one the U.S. will adopt nationwide in 2014, so the cost in Massachusetts today is probably a good guide to what health care will cost nationally.
Here are the numbers: $19,022 for membership in an HMO, which was supposed to be the magic bullet for controlling health care costs in the U.S; $1,781 for dental; total = $20,803.
Let’s compare this to median income in the U.S. The Census Bureau estimates that median household income in 2008 was $52,029, which might include two working parents plus the kid’s lemonade stand revenues. Bureau of Labor Statistics says that the median hourly income in the U.S. was $15.95 in May 2009, which works out to $31,900 for a person working 40 hours per week, 50 weeks per year.
When you consider that local, state, and federal governments need to collect substantial tax revenues from the median worker in order to fund their near-50% share of the U.S. economy, this means that health care for a small family is likely to consume 100 percent of the after-tax income of a typical U.S. worker.
Another way to look at this is that we’ve produced a great health care system for rich people, but we forgot to make most Americans rich!
[The mismatch between income and ability to pay for health care should be widening. Median wages in the U.S. are surely falling, if only because so many Americans now have a wage of $0. Health care and health insurance costs have risen every year in both Massachusetts and nationally. Sources: A 2009 article on health care inflation outpacing salary increases; an article today comparing health costs to reported inflation]