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Health care costs are eating your pay raise

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A fascinating new analysis from RAND Research Highlights, via The Conversable Economist.  Health care costs have increased over the past decade about as much as your pay raises, pretty much eating any increase in income you've had over the years.

"To paint an accurate picture of how health care cost growth is affecting the finances of a typical American family, RAND Health researchers combined data from multiple sources to depict the effects of rising health care costs on a median income married couple with two children covered by employer-sponsored insurance. The analysis compared the family’s health care cost burden in 1999 with that incurred in 2009. The take-away message: Although family income grew throughout the decade, the financial benefits that the family might have realized were largely consumed by health care cost growth, leaving them with only $95 more per month than in 1999. Had health care costs tracked the rise in the Consumer Price Index, rather than outpacing it, an average American family would have had an additional $450 per month—more than $5,000 per year—to spend on other priorities."
Anyone who tells you we have the best health care in the world is lying. We do excel in some things, such as cancer survival rates.  But then again, good luck getting your cancer treatments paid for with an American health care plan that may very well have a lifetime cap that shuts you off if your cancer lasts too long (i.e., if you live too long). Talk about your death panels.

If you have a cadillac plan that covers everything forever, then you're in fine shape. If you're like the rest of us, you're fine if you're healthy, but if you get really sick, and need thousands of dollars a month in medication, for example, good luck.  Oh, the medication is there - best in the world! - you just won't be able to afford it, and your plan won't cover it.  Hell, my insurance only covers $1500 a year in prescriptions - that's $125 a month. And anyone who has to take any prescriptions knows it's pretty easy to chalk up $125 a month and not be very sick at all.

America does have some of the best health care in the world, if you can get it.  And for a lot of us, it's a crap shoot.  So long as we don't get "too" sick, our insurance is fine.  But good luck when your kid has an emergency appendectomy and, like what happened to Joe a few years ago, the hospital charges you $25,000 for what you thought was pretty run of the mill surgery nowadays.  What's your copay: 20%, 40%?  At 20%, you'd owe $5000.  At 40%, you'd owe $10,000.  Do people really have that kind of money nowadays to spend on an unexpected expense?

Best health care in the world.  Unless you get sick.  Then, not so much.

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