Health Care Math: It Doesn't Add Up
Submitted by Jeff on Thu, 10/11/2007 - 12:02pm.
The Ohio Health Care Policy Review notes today that the average annual health care cost for a typical family of four is about $14,500, an increase of 8.4% over last year. (That is a lower increase than for the several preceding years, but still outstrips inflation and average wage growth.)
Opponents of SCHIP expansion keep asserting that the proposed eligibility limit of 300% of the federal poverty limit (which translates to about $60,000 for a family of four) means that program would cover middle-class people who can afford to buy their own health insurance. Putting aside the fact that the SCHIP expansion is needed for families whose children have pre-existing conditions, which means that their health care costs could be above average, let's see if that family of four living on $60,000 has enough money to buy health insurance.
Middle-income Americans pay about 40% of their income in federal, state, and local taxes, so after taxes our family has $36,000 left. Average Americans pay about 20% of their income for housing, so that leaves $24,000. Food? Well, a few years ago the average household spent 13.5% of its income on food, so that leaves about $16,000. The average expenditure for transportation is about 6% of income, so that leaves ...
$12,400! Less than the average cost of health care! And we haven't even considered clothing, saving for college, school supplies, non-health insurance, and everything else!
I think your expense figures are low too
They say you should spend about 25% of your net income for housing but in reality most Americans these days spend more. It would be difficult for a family of four in most places to find adequate housing for $1200 a year. In Clevleand, you probably could. In Chicago, LA, San Francisco or New Jerey, dream on. I think those other percentages are deceptive too, because they dollar amount o spent on food for four or transporation is likely to be fixed by other factors other than income, and hence the percentage will fluctuate. A bus fare or the price of a gallon of milk doesn't decrease because you make less money.
If the amount devoted to taxes is accurate (I suspect it might be a tad high), this family could barely survive, even without paying for health insurance. Remember, Tony Snow had to leave his White House job because he couldn't survive on $168,000! And I'll bet Tony Snow has fully paid, guaranteed health care coverage.