In 2017, according to the Centers for Medicare and Medicaid Services, healthcare spending for every man, woman and child in the U.S. totaled nearly $11,000 – more than any other wealthy country. The interesting thing is that very few of us really know what goes into this number or who pays the bills. Here are a few facts you may find interesting.
- The average cost of employer-based health insurance for a family in 2019 was $19,616.
- The Census Bureau reports that 91.5% of Americans have health insurance coverage.
- In 2017, the average ER visit cost about $1,400 – an increase of 176% in 10 years.
- Federal, state and local governments currently pay for about 45% of all healthcare services.
- From 2000 to 2016, spending on prescription drugs rose by 69% – more than any other component.
- The Kaiser Family Foundation reports that in the past year, 50% of Americans put off needed healthcare because of cost.
America’s Health Insurance Plans, a national trade association whose member companies provide insurance coverage and health-related services to consumers and businesses, has released a study revealing the breakdown of today’s healthcare premium dollar, as follows:
- 23.3 cents of every premium dollar is used for prescription drugs
- 22.2 cents cover the cost of physician services
- 20.2 cents are used to pay for office and clinic visits
- 16.1 cents are used to cover hospital stays
- 13.5 cents are applied to care management, administrative expenses, business expenses, provider management and other fees
- 4.7 cents of every dollar go to taxes, and…
AHIP reports that on average, 2.3 cents of every premium dollar make it to the bottom line as net profit.
The American Institute of CPAs reports that its poll of 1,100 working adults revealed that by a 4 to 1 margin, workers would choose a job with benefits over an identical job that offered 30% more salary without benefits. Employed adults estimate that benefits represent about 40% of their total compensation. When asked which benefits are most valuable over the long run, 56% said a 401(k) match or health insurance while just over 30% said a pension.
Voluntary benefits are a growing trend that allows employers to enhance their overall benefits package. While voluntary dental, vision, life and disability insurance are familiar, the popularity of critical care insurance has been growing dramatically. Critical care coverage typically pays a lump sum directly to the insured upon diagnosis of a covered critical illness and is generally used for daily living expenses and things like co- payments, mortgage payments and childcare. This increasingly popular offering can provide a financial safety net against hardship driven by out-of-pocket medical expenses.
The Affordable Care Act is in full effect, but will these mandates remain in place after the 2016 elections? Henry Aaron, senior fellow at Washington-based Brookings Institution with a PhD in health care-focused economics, outlines two scenarios for the New England Journal of Medicine.
Even though Congress and the President are deadlocked in a battle over the individual mandate and other aspects of the Affordable Care Act (ACA), the IRS has finalized regulations for the shared responsibility payment due from those who do not maintain minimum essential coverage beginning in 2014. Continue reading
Even though the Affordable Care Act will provide access to health coverage for millions of Americans who were previously uninsured, many say there is no guarantee they will actually get to see a health care provider when they want to. Shortages of doctors and nurses already exist and the addition of more covered patients is sure to make the situation even tougher. Continue reading
While the failure of the congressional “super committee” to reach an agreement triggers a 2% across-the-board cut to Medicare, this is thought to be far less than the $500 to $700 billion lawmakers on the panel were discussing prior to their deadline. Physicians and hospitals will feel the impact but the $123 billion that will need to be cut over the next 10 years is minimal compared to cuts imposed by deficit reduction legislation enacted in recent years. Continue reading