You think the cost of health care is hard on lower-middle-income families right now? In a few years, if current trends continue, it will be much worse.
Families with a “gross wage base” between $20,000 and $60,000 a year are about to be swamped by health care costs, Princeton health economist Uwe Reinhardt argues in a guest post on the New York Times blog Economix.
Gross wage base is basically all of the payroll expenses an employer pays for a person — including salary as well as both the employer and employee’s contributions to health insurance premiums.
A family making $60,000 a year today is likely to be making about $80,000 in 2017, Reinhardt says, assuming 3% annual wage increases. And, based on current trends, health costs for a typical non-elderly family will top $33,000 that year, up from $15,600 in 2008.
Before accounting for taxes, health care would account for some 40% of the family’s budget. Reinhardt writes:
These numbers, which are realistic, suggest that before long the gross wage base earned by American households will become too small a donkey to carry the load of the familys spending on health care. It will put before Americans an uncomfortable choice.
Either Americans in the higher income strata must step up to the cashiers window to help subsidize, with higher income taxes, the health care of the most hard-working members of the lower income classes, or the United States will have to evolve toward a noticeable two-tiered or multi-tiered health care system, with bare-bones, low-tech health care for families in the bottom half of the income distribution and increasingly superior, high-tech health care for families in the upper-income strata.
Health Blog Question for the Weekend: If you’re in a high income bracket, would you pay higher taxes to subsidize health care for lower-middle-income families?
Donkey by Hamed Saber via Flickr
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Families with a “gross wage base” between $20,000 and $60,000 a year are about to be swamped by health care costs, Princeton health economist Uwe Reinhardt argues in a guest post on the New York Times blog Economix.
Gross wage base is basically all of the payroll expenses an employer pays for a person — including salary as well as both the employer and employee’s contributions to health insurance premiums.
A family making $60,000 a year today is likely to be making about $80,000 in 2017, Reinhardt says, assuming 3% annual wage increases. And, based on current trends, health costs for a typical non-elderly family will top $33,000 that year, up from $15,600 in 2008.
Before accounting for taxes, health care would account for some 40% of the family’s budget. Reinhardt writes:
These numbers, which are realistic, suggest that before long the gross wage base earned by American households will become too small a donkey to carry the load of the familys spending on health care. It will put before Americans an uncomfortable choice.
Either Americans in the higher income strata must step up to the cashiers window to help subsidize, with higher income taxes, the health care of the most hard-working members of the lower income classes, or the United States will have to evolve toward a noticeable two-tiered or multi-tiered health care system, with bare-bones, low-tech health care for families in the bottom half of the income distribution and increasingly superior, high-tech health care for families in the upper-income strata.
Health Blog Question for the Weekend: If you’re in a high income bracket, would you pay higher taxes to subsidize health care for lower-middle-income families?
Donkey by Hamed Saber via Flickr
Discuss Add this link to... Bury
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