The average income for a family of four in America reached $48,200 in 2006, which was good news from the Census Bureau released last month. The bad news is that the average cost of health insurance for a family of four will hit $12,106 this year, according to the annual report on employer-sponsored benefits from the Kaiser Family Foundation.

While the cost increase was lower this year than last — at 6.1% — this is still more than twice the rate of general infaltion, which was 2.6%. And workers’ wages increased only 3.7%. Thus, health insurance costs continue to rise faster than workers’ paychecks.

The percentage of the premium that workers pay remains the same from last year, but in real dollar terms, the contribution is higher — $3,281 for family coverage. After taxes (assuming taxes of 20%), premium contributions represent over 8.5% of annual disposable income for a family of four. After paying the health insurance premium, the “average” family of four would have $35,279 left for other spending on shelter, food, clothing, and other necessities of daily living.

One of the newer necessities of daily living for Americans is technology, according to the numbers. Americans are happy to allocate 5% of their household spending to technology gadgets. Last month, Wired magazine published its Technolust page calculating Americans’ budgets for technology at home, reproduced here.

This chart demonstrated that Americans spend a lot more on technology — cel phones, DVDs, other gadgets — than on health insurance (5% of spending vs. 3%). Prescription drugs ate another 1% of household spending. No doubt that many (most?) people would rather spend $20 on a new DVD versus a prescription drug copayment.

One important point missing from this chart is that we spend money in areas not specifically noted as “health care” to improve our health. In fact, some technology is used for health reasons; for example, my DVDs devoted to Pilates, yoga and exercise dancing. My “food” spending goes partly to vitamins, minerals, and supplements, calcium-infused orange juice, and anti-oxidant gum. And, there’s lots of health-related spending in the massive “other” category.

As Americans take on more traditional health costs in the form of higher premiums and greater copayments and coinsurance, spending in other areas will be impacted. Keep an eye on this phenomenon, because it will drive changes in spending for food, shelter (think Intel-inside your home), and of course, technology.

Health Populi Hot Points: If you have health insurance offered by your employer, count yourself fortunate and opt-in. Buying health insurance yourself on the open market is neither easy nor fun, and not having it can quickly bankrupt you. Think about your household spending in terms of investing in your health, and you might find yourself making different decisions.

Sources: U.S. Census Bureau (www.census.gov/Press-Release/www/releases/archives/income_wealth/010583.html), Wired Technolust Column, August 2007 (www.wired.com/techbiz/it/magazine/15-08/st_infoporn)

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