Income doesn’t seem to go as far as it used to? Family health care expenses are a large reason why. A study just released by Milliman Medical showed that their 2010 index for family medical expense rose to $18,074 from 2009’s $16,771, an increase of 7.8% or a record setting $1,303 on the year!
Read the full report here, it is easy to follow and has many good charts:
Milliman Medical Index 2010
Their study adds up the total medical spending costs for the average family – more than $18,000.
Medical costs have increased $4,692 per year over the past 5 years, an increase of 35%! This 35% annual increase since 2006 compares to a 4.9% growth in household income. Sustainable? I think not, it sounds more like bubble dynamics to me.
It gets even worse when viewed over longer time periods. Going back and reviewing Milliman’s report for 2006, we find the following chart going back to the year 2002 when growth rates were running above 10%.
Although 2010’s percentage rise is not as high, the dollar figure is growing exponentially.
Here are the annual cost figures going back to 2002:
Since 2002 family medical costs have risen 96%! Have incomes kept up with that? Certainly not! Incomes and medical expenses are on two different curves, just as are income and debt. It’s certainly no coincident that debt has also grown over the same time period – that is exactly how and why increases in medical costs, housing costs, automobile costs, etc. came about, it was financed. And now here we are, incomes in the same place, expenses soaring, debt saturated.
This year’s $18,000 total annual medical spending compares to the median household income, according to the Census Bureau, of $52,175. That equals a staggering 34% of median household income.
However, of that $18,000+ that is spent, employers pay for 59% of it and following three consecutive years of individuals paying an increasing share of the expense, 2010 actually saw the employer’s share increase slightly.
The 41% of the cost paid by employees equals $7,330 per year, or “only” 14% of household income. In 2006 employee share was 38% of the total.
Here's how the percentage of the national average breaks out by region, sorry Floridians:
Universal health care going to keep costs down? Please. It’s more like the mandatory Gestapo Insurance Vampire Economics (GIVE) program. Insurance company bonuses, bubbles for everyone!
Oh, you’re not in the financial or insurance industries? Sorry, GIVE is not for you. You, my friend, are a part of the Tax And Keep Economy (TAKE).