How Your Doctor Ate Your Paycheck

health - insurance premium increasesThis is where your money has gone instead of showing up as raises in your pocket:

The Kaiser Family Foundation and Health Research & Education Trust are out this morning with their annual survey of employer-based insurance. The results, unsurprisingly, aren’t pretty: health insurance premiums for employee-based health insurance have increased 113 percent since 2001…

This is where your money will be disappearing at a theater nightmare near you:

… and are expected to more than double from an average of $15,073 today to $32,175…

… Health insurance costs have risen fast enough to eat up an entire decade of earning increases, a Health Affairs study found last month, and this new survey shows they could continue to do so for the next 10 years, too.

This is why curbing the cost of health care, and in turn the cost of insurance plans, is the absolutely most important issue this country will face in the next decade and onward until this issue is resolved.

Unless it’s resolved, this trend will continue until medical care is so expensive that the cost will stop increasing simply because people will cease to bother trying to get insurance or medical services because they cannot afford even a simple check-up.

But wait, don’t employers pay for their employee’s insurance most of the time? Yes. That is why employers have been reluctant to increase wages to that much and why even though your wages have gone up (barely), they haven’t gone up enough to afford the same standard of living. Employers are paying much more than they used to in order to insure you.

Here’s the more terrifying thing:

health - employee share increasingWhile that squiggly red line is scary, the chart that might matter more shows the share of benefits that employees are paying for. Over the past decade, not only have employees’ benefits cost more, as medical costs have risen, but employers have come to expect subscribers to pick up an increasingly large part of the tab…

As medical costs go up, they push insurance costs up, employers are trying to push that cost onto their employees. The difference is between nominal income (the exact dollar amount in your paycheck) and real income (the amount of goods you can buy with that nominal income) means that because medical costs have gone up, you cannot get the same number of goods that you used to.

The increase in medical costs are not just eating up your raises, they’re going to start eating up your paychecks as employers expect you to pay a higher portion of your insurance package to go along with the higher co-pays and fewer benefits.

And no: this has nothing to do with the Patient Protection and Affordable Care Act. If you look at the growth trend, you can see that medical costs and insurance costs have had a growth trend for decades.

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