Trying to understand what an average family or individual pays for healthcare is an almost impossible task.
According to a survey by the Kaiser Foundation, employer-provided plans cost about $5,600 for individuals and about $16,000 for families. Employees pay 15 percent of the premium for individual plans and about 25 percent of the premium for family coverage.
In addition to premiums, there are deductibles and co-payments, which average about $1,000 a year for individuals and $3,000 a year for families.
So for now, the combined employee share of premiums and co-pays/deductibles average $2,000 a year for individuals and $7,500 a year for families.
A quick check on the data shows that’s not quite right.
Census Bureau data show average family income is $45,018 a year, which means an average family would spend 17 percent of their income on healthcare. This is more than three times the official estimate of family healthcare spending. Bureau of Labor Statistics data reveal about 6.7 percent of family spending is dedicated to healthcare.
There is no way to reconcile all the different data and all that is clear is that the average American family spends something on healthcare.
All of that will change soon, when mandates and higher premiums come into effect. The Affordable Care Act will require increased spending, but sets caps on insurance premiums based on income. The average family (two parents with two kids) will pay about 6 percent of their income for insurance ($2,700) plus co-pays and deductibles. Two adults with no kids making an average income will pay 9 percent of their income for insurance ($4,050). When co-pays and deductibles are added, the family with children could see savings, while many others will be paying more.
There will be winners and losers under Obamacare. Many Americans, probably anyone making more than average and younger than 65, will pay more than they do now. This will reduce consumer discretionary spending and tilts the odds in favor of a recession in 2014.
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