[I note parenthetically that the GDP was $13.21 trillion in 2006, and $526 billion in 1960; an increase of 2,508%. This calculates to 2,234% increase in health insurance spending by employers, during an interval when the economy grew by 2,508%. Data for this calculation was drawn from the Centers for Medicare and Medicaid’s National Health Expenditure data. Economists will tell you that richer countries have a greater appetite for health spending than poorer ones. A question, then: how much spending is enough?]
Health Populi’s Hot Points: If the trend of health-as-a-proportion-of-total-compensation continues, what is the end-game? Reductio ad absurdum, 100% of pay would eventually go to health. How absurd is that scenario? It’s worth working through the scenario. In some households, paying for health can consume well over 10% of take-home pay for average income earners. In households where health insurance is offered by well-meaning employers, a growing percentage of families decline the offer; the chart on the left demonstrates employees’ declining take-up rates of health insurance as the amount they contribute to the plan increases.
KFF also reports that most Americans don’t buy health insurance if it’s not offered at the workplace — regardless of how much people earn. This lack of utility for health insurance is not a trivial one in the era of consumer-directed health. Among families earning as much as $186,600, only 49% bought their own health insurance. This implies that without a mandate for universal coverage, millions of families will continue to opt out of the pool. And a smaller pool means higher costs for everyone.