Random thoughts. $25,000 a year health care tax.


Last summer we were in Holland and met a high school teacher, Janni. She’s a single mother of two daughters and lives in the city of Utrecht.

Her children’s education is free through the university as is her health care. Taxes on income are high, but graduated. The rich pay much more than Janni does.  But even Janni pays more in taxes than the average high school teacher in the U.S..

If you don’t count the $25,000 a year the average U.S. family pays for health care.

The average total cost of health care for the typical family of four will top $25,000 this year.

That projection — from the annual Milliman Medical Index — includes the average cost of health insurance paid by employers and employees, as well as deductibles and out-of-pocket expenses for the most common type of health plan.

The total cost — $25,826 this year — may prompt disbelief. But few people realize what their employer spends to provide health benefits or the potential cost of deductibles and other out-of-pocket expenses if someone in a family has a serious illness or even a series of relatively minor mishaps.

“A lot of people are sheltered from the true cost of health care, despite the fact that they are paying more than in the past,” said Scott Weltz, a principal and consulting actuary who works out of Milliman’s office in Brookfield.

They are paying much more: The Milliman Medical Index has more than tripled since its first year in 2001.

The index is no more than a gauge, and actual costs vary. Most people, for instance, are fortunate enough not to have high out-of-pocket costs in a given year.

But it makes clear the total cost of health care spending for the typical family.

“It is shocking — it’s heart stopping,” said Paul Hughes-Cromwick, co-director of the Center for Sustainable Health Spending at Altarum Institute, a nonprofit research and consulting organization in Ann Arbor, Mich.

That’s especially true when compared with the median U.S. income of $83,414 for a family of four in 2014.

The Milliman Medical Index tracks only people who get health insurance through an employer. Total health care spending is even higher, largely because it includes people over 65, who have higher health care expenses.

That’s a health care tax and it’s a tax that weighs most heavily on the poor and those who can least afford it.


Anne and I greeting President Obama. Wakarusa, Indiana. 2009.

9 Replies to “Random thoughts. $25,000 a year health care tax.”

  1. That’s high and bull even in this day of Obama “you can keep your plan and doctor” care.
    How is that computed?
    You should be more skeptical Fred.
    Health care costs do suck in U.S.,A but not that bad.


  2. “No one should go without health care.” Bernie says it’s a basic human right. So – not just in America, as Anne’s sign says, but anywhere in the world.

    So, I wonder just what it IS OK to go without? No one should go without food, certainly – but to what food, exactly, does that right extend? Bread & Water? Caviar & filet mignon? Where is that line?

    No one should go without clothing, certainly. T-shirt & shorts, or fashion-design? Where is the line?

    No one should go without shelter, certainly. Tenement apartment? $250,000 home in the ‘burbs? Fred Klonsky’s spare bedroom (and if he doesn’t have one, then in his living room on the sofa)?

    No one should go without a phone, certainly.

    No one should be without access to the internet, certainly (in order to access FredKlonsky.com – a basic human right).

    No one should be without transportation (interstate commerce being a constitutional right), certainly. Free bus rides, or a New Coupe deVille?

    No one should be without a care-free retirement after about age 55 (for now, it’ll get lower as we go along), certainly.

    No one should die on the streets, but what about a trip to the emergency room for that nagging hangover? That breast implant? That tummy tuck? My psychological fear of the IRS?

    Do you see a problem here?

    1. Actually, Akvida, I don’t. Countries all around the world have seemed to resolve this dilemma that paralyzes you. Throughout Europe and Canada people don’t have to worry about their health care costs. The earth didn’t crack open as a result. Snakes and lizards didn’t fall from the sky.

  3. As long as insurance companies are allowed to exist in health care, the cost will continue to go as high as they possibly can push it. Insurance started out as a good idea to protect people from disasters. But now it is a huge, money-sucking industry costing all of us tens of thousands of dollars.

    These insurance companies must go. Health insurance, car insurance, life insurance, flood insurance, house insurance, where does it ever end? Bernie has it right. Medicare for all at the very least. No one should ever loose their homes due to medical bills. Then we can start cutting the other many insurances that plague us.

  4. The whole story is a good read. One inaccuracy. Median household income is just 51000 not 80. This also explains why we get positive Gdp . When Hillary or the right wingers claim our growth is higher than Europe it is because of our inflated health care. It is also the real cause of all our budget problems not pensions not education.Now if we got 3 trillion worth and all lived to a health 130 that would be one thing but ……

  5. Barb. Its really health the others are not bad.Its also the helth that is driving workmans comp that our crazy gov is obsessed with.throw in nursing home it really is not insurable. Obamacare did do us a favor. It showed the whole system is broken. For 2 of us we would have to pay 15000. All our other instance and heck property taxes and utilities would not come to that.No wonder the economy sucks there is no discretionary spending to buy junk from China.

  6. Speaking of health care, today I heard Rauner demanded a new item be added to his Turnaround Agenda, and it be passed before he will talk about the budget. Rauner’s latest item is to cut state employee and retiree health insurance, and to legally exempt health insurance from public employee collective bargaining. I heard the democrats walked out at that point.

    1. Pretty much what happened. He seems to be ignoring the Kanerva decision and will demand a premium for all but the lowest plan even though the policy and Kanerva make it illegal. I am sure IFT and AFSCME will demand an injunction. How it affects a Rauner forced strike I am not sure. I can say expect forced strike no state government no school in fall.Expect federal and state legal action and if the judges do the right thing and jail Rauner for violation of various consent decrees. This last one is hope.The rest looks inevitable. I think Rauner ended talks. Long hot summer coming.

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