How much does health insurance cost?

Those of you who have listened to me on the radio have heard me say that the average employer provided health insurance plan for a family costs “over $12,000”.  That was the old data.  Here’s Drew Altman from the Kaiser Family Foundation with the most recent numbers:

The first number was the average cost of a family health insurance policy in 2009: $13,375. To put that number in context, if you are an employer, you can hire an employee at the minimum wage for about $15,000 per year. If you are a consumer, you can rent an average two-bedroom apartment nationwide for $11,136 per year (though it is quite a bit more here in Menlo Park, California where our Foundation is based). You can also buy a new Chevy Aveo for $12,000, and it gets 35 miles per gallon on the highway.

Take a second and think about that.  The average plan (not the gold-plated plan) costs over $13,000 a year, more than rent for some people.  Think about that every time someone tells you that a family is making a “choice” not to purchase (average) health insurance.  It’s not a choice between a cell phone and insurance; it’s a choice between having somewhere to live and insurance.

Even more concerning is how little we are doing to contain costs:

The 5% increase we found in premiums is moderate by long-term historical standards. For example, two different times during the last decade premiums increased by 13% a year, in 2002 and 2003. This year’s increase continues a multi-year period of relative moderation in premium increases. Still, over the last ten years premiums have increased by 131%, while wages have grown 38% and inflation has grown 28%. Consider this: If people (and businesses) are as concerned as they are now about rising health care costs in a period when they are actually moderating, how much more concerned will they be when rates of increase return to historic averages?

Premiums have more than doubled in the last ten years, and that’s considered good!  Wages haven’t even gone up 40% in the same time period, and last I heard, things aren’t going so well for many people in the economy.  This paints a bleak picture for the future.  It’s one of the main reasons I find our lack of a national dialogue on cost-containment to be shameful.  Nothing, in either HR3200 or any serious counter-proposal, has been about how we are going to get a handle on costs in the future.  That would involve sacrifice, and the courage to discuss it.  Who will?

I encourage you to read the full report.  Decide for yourself.

UPDATE: I completely forgot to mention that the $13,375 does not include deductibles, co-payments, co-insurance, and potentially out-of-network care. That would need to be added to the premiums to determine the true costs of care. It’s staggering.

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