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.