On average, the total cost of health care for a person under 65 is around $600 to $700/month, including premium, co-pay, deductible, out of pocket, etc. So a lot of employers do pay something like $300/month per person, with the remainder being paid as an employee share or in the form of co-pays, deductibles etc.
The $800/month figure is for all Americans (it’s actually $850) but that includes the over-65 who cost more due to age related health conditions.
As to the $800 to $1,200/month figure, that makes sense for a household of 2 to 4 people. Since most working age people are in multi-member households, I could see the “per employee” costs being in that $800 to $1,200 range, including coverage for family members.
Just to be clear, when I’m talking about the “cost” of health care, I’m talking about the total cost, not the cost of premium to the individual. In the big picture, the total cost is what matters.
As to scott’s point about the typical family not costing that much, if you define “typical” as either median or mode, he’s correct. If you are talking about the mean average, then yes, the total cost of health care person in the US is around $10,000 to $10,500 per year, roughly $850/month per individual (including all ages and all people).
Ah but that was the old Republican party where socialism is a dirty word. The new Trump party likes Russia and socialism. After all he is picking winners and losers by subsidizing the Coal, and Steel, and old industries. He is giving even more subsidies to farmer, who are complaining about his tariffs. Not to mention socialism is highly associated with our new BFF Putin and Russia. Democrats should strike now while socialism is popular with both Republican and Democrats to put socialized medicine in place.
Prior to ACA family coverage was kind of a one price fits all, with the insurer not really caring how many kids you had. After ACA the kids became their own little price points as with age they become more expensive.
The Blue Shield insurance I paid for with my company cost me $1,600 a month for me, the wife and a 25 year old. Of course us being in our 60’s has a lot to do with that. It had a $40 co-pay with $5,500 deductible by the way.
The union my employees belong to (carpenters) has had a lot of trouble trying to keep up with the cost of health care. Currently a 40 hour week costs the company $440 a week in benefits to the union. And that is for Kaiser.
One of the insane things about our current politics is that if the business-friendly party were not also the insane party, the business lobby would strongly want health care reform. The current system is not just unsustainable for government, as the right wing often complains about Medicare, but it’s also unsustainable for private employers and individuals.
Up to now, 90+% of our health care reform efforts have been aimed at the issue of coverage, but i believe coverage is only half the problem. The other half is health care pricing.
I can recall the other execs ranting about Obama and his socialized medicine. Then we’d go into a meeting on budgets, and they would rant about how much it was costing us to provide health insurance to our employees. I kept thinking if only we had more socialized medicine this would probably not be our problem.
The perverse incentives that exist for drug companies are unfathomable. An absurd share of their R&D goes to concocting ways to keep existing popular drugs under patent protection in some form, and whole new business models of pricing arbitrage have sprung up.
The albuterol inhalers I’ve needed for literally my entire life are a particularly disgusting example of the sociopathy of pharma companies.
Going out of patent, they lobbied the shit out of congress to declare them illegal in the whole CFC scare. Nevermind that the CFCs released by the propulsion mechanism were literally almost impossible to detect and in no way posed the tiniest of threats to the ozone layer. Thank goodness they had a new, CFC free formulation eligible for a whole new patent, ready to go!
A few more decades of charging 50 bucks per inhaler to tens of millions of asthma sufferers buys a lot more legislation than that.
Remind me again how American drug prices are necessary to fuel life saving innovations, and there’s no possible other way to fund research.
I don’t know about you, but I do my best thinking on the deck of my yacht, The Individual Mandate. I have that yacht to thank for all of my greatest ideas, such as “cancer is bad” and “what if we didn’t get smallpox?”
The biggest driver of healthcare costs today is drug prices and, unless you also implement some kind of controls on that, socialized medicine won’t solve the cost problem. Instead of complaining about the cost to private business, everyone will just be complaining about their tax increases.
I would consider some kind of price controls on all medical products and services part of socialized medicine. There’s a reason Medicare’s reimbursement schedules are lower than anyone else’s: negotiating power.
It’s not negotiating power. Medicare reimbursement rates are dictated by CMS, not negotiated. I’ve worked in that system for many years and Medicare does not negotiate prices with providers. The reason that works is the private payer system exists alongside it. The private system subsidizes Medicare by making up for what Medicare pays too little for. That, along with drug prices, are why private health insurance prices are so high. It’s the reason that the CEO’s of the hospitals cited by Obama as great models – Johns Hopkins, the Mayo Clinic and the Cleveland Clinic – said they would have to close their doors if they had to accept Medicare rates for all their patients. They can’t exist without that defacto subsidy. Negotiating drug prices would help, but it won’t make up the difference.
I don’t believe this is accurate. Our pharmaceutical costs are among the world’s highest, but they still account for only 10-15% of overall healthcare spending.
It’s certainly an issue. But physician salaries, fee-for-service and other factors appear to be larger ones.
I believe the good news on healthcare is that it’s a solved problem. Multiple countries do far better than we do. We have major issues around the politics, and the transition period will have a certain degree of chaos, but there are multiple models already working in the real world.
This is wrong in several ways. First, Medicare doesn’t “dictate” prices any more than corporations “dictate” prices by offering one price for various services. If you don’t want to pay AT&T’s price for cellular, then you don’t. Under our system, that’s a voluntary choice; nobody is dictating. The same thing is true for Medicare: no medical provider is required to accept Medicare prices or patients, with exceptions for certain emergency room patients. If Medicare sets prices too low, then providers will simply stop accepting Medicare patients.
Second, how is possible for the private system to “subsidize Medicare by making up for what Medicare pays too little for.” I mean, the private system is market based. So if medical providers could charge a higher price, they would. Under what mechanism does Medicare cause private prices to go up? The reality is the opposite: since health insurers know what the Medicare rate is, they have very little incentive to offer much more than that. They will, sometimes, when the supply of providers is tight (like in rural areas), but in general Medicare has no ability, no mechanism of causation, to cause private prices to go up.
As an aside, that’s a good test of the validity of an argument: if you make an assertion and there’s no mechanism of causation or causal linkage that could make that happen, that assertion is probably bogus.
As to hospital CEO’s saying they will close their doors, really, you believe that? There’s no self interest in those statements, surely? The example of hospitals IN EVERY OTHER DEVELOPED COUNTRY (which all have some form of government price controls) just doesn’t apply?
And most importantly, what’s the alternative to some form of government price intervention? We have decades of history both here and in the developed world that when we allow the imperfect inelastic market in health care to set prices, they go up far faster than the rate of inflation, in an unsustainable way, that every single other developed country has brought under control. The market is our best economic tool, but it just doesn’t work in every single circumstance. Health care, where lack of a product can kill you, is a classic example of an inelastic market, and thus relying on the market by itself is pretty much ass-hatted.
In the long run, we are either going to implement some sort of government price intervention in health care or bankrupt both the public and private economy in this country. The strong evidence of past decades is that persisting in trying to force the market to work for health care, where it just doesn’t fit, is foolish.
Keep in mind, not every form of “government price intervention” is full blown price controls. There are a number of variants, such as “all payer rate setting” and a few others. But some form of price reform is inevitable.
Anyone who is paying for commercial insurance is subsidizing Medicare and also Medicaid as well as the uninsured. Medicare does have the power to set prices since there are a number of commercial payors that will set their contract at x% above Medicare… aka, they’re using Medicare as a base. Beyond just straight up prices, if Medicare decides something isn’t covered, or changes the way they will pay something, ,a lot of payors will follow suit, just a matter of time.
There are and have been several health systems / hospitals, that went bankrupt and closed. It’s not ultra rare. It does happen.
I wasn’t talking only about prescription drug rates. If Medicare weren’t prohibited by law from negotiating drug prices, then the Medicare discount rates for drugs would as good as they are for all other Medicare reimbursement rates.
So theory aside, this does seem to be a fact that is happening in the world.
I think the most plausible explanation of the phenomena was from this link:
E.g. that there are so many fixed costs for a hospital, that they choose to cover some patients at money-losing prices rather than just have the capacity be unused, in which case they would lose even more money.
Another potential explanation is here:
E.g. all the pricing numbers are completely made up gibberish, which is why conventional economic theory isn’t working as expected.
