The True Cost of Healthcare: Both Direct & Indirect Spending

According to the Kaiser Family Foundation, The typical family in the U.S. spends $8,200 per year, or 11% of their income, on health care. This does not include employer contributions; and it can vary substantially by income, type of insurance, and health status. Lets examine the Per Person Spending on health care for individuals and families in the U.S., including costs that are often less visible to consumers. Per capita national health expenditures indicate the average cost per person to different payers for various health care services.

Trend Over Time:

Notes: A constant dollar is an inflation adjusted value used to compare dollar values from one period to another.

Country Comparison:

Notes: U.S. value obtained from National Health Expenditure data. Health consumption does not include investments in structures, equipment, or research.

By Diagnosis:

Note: *Estimate is significantly different from estimate for all other groups (p<.05). For all diagnoses shown, with the exception of asthma, diagnosis status was asked only of respondents age 18 or older. All respondents were asked about their asthma diagnosis status.

By Insurance Status:

Note: *Estimate for uninsured is significantly different from estimate for insured (p<.05).

Annualized spending is equivalent to 12 months of spending among large group enrollees with at least 1 month of coverage. Median annualized spending among COBRA enrollees was $1,446 in 2018.

By Age:

Note: *Estimate is significantly different from estimate for all other groups (p<.05).

By Sex:

Note: *Estimate for males is significantly different from estimate for females (p<.05).

By Age and Sex:

Note: *Estimate for males is statistically different from estimate for females within indicated age range (p<.05).

By Race and Ethnicity:

Note: *Estimate is statistically different from estimate for all other groups (p<.05).

Per Enrollee:

By Health Status:

Note: *Estimate is statistically different from estimate for all other groups (p<0.05).

Notes: *Estimate for worse health is significantly different from estimate for better health (p<.05). Better health is categorized as those who report excellent, very good, or good health. Worse health is categorized as those who report their health as fair or poor.

By Amount:

Analysis

Economists generally believe that employer spending on health benefits and payroll taxes depresses wages, but workers do not directly observe that cost. If the aforementioned single person earning $50,000 annually obtains coverage on the individual market instead of through his or her employer, she can expect to spend 20% of her income on health care.

Household health spending also increases significantly when health status worsens, largely due to the additional out-of-pocket costs associated with greater use of health care services. A family of four in good health with employer-sponsored coverage and earning $100,000 per year spends about 12% of their income on health care. If at least one member of the family reports worse health, household health spending increases to 15% of their income.

Sources

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of CMS National Health Expenditures Accounts

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of Medical Expenditure Panel Survey

Source: KFF analysis of Medical Expenditure Panel Survey