Health insurance premiums will surpass median household income in 2033: study

Health insurance premiums will surpass median household income in 2033: study
Experts say what kind of care should be covered, not who pays for it, is the real issue.

(HealthDay) -- If current trends continue, health insurance premiums will surpass the median U.S. household income in 2033, a new study says.

Using data from the Medical Expenditure Panel Survey and the U.S. , researchers calculated the premiums paid by Americans from 2000 to 2009 and compared them to incomes. They found that insurance premiums rose 8 percent from 2000 to 2009, while household incomes rose only about 2 percent.

If those same rates continue during the next two decades, the average cost of a family health-insurance premium will hit half of median by 2021 and surpass it by 2033, the study found.

The median household income was $49,800 in 2009.

The study is published in the March/April issue of the .

The calculations in the study include all premium costs -- including the portion paid by the employer and the employee. What the projections don't include are out-of-pocket costs, such as co-pays for treatments and drugs.

When co-pays are factored in, the situation looks even worse, said co-lead study author Dr. Richard Young, director of research at John Peter Smith Hospital in Fort Worth, Texas.

According to their projections, the employee portion of the premium plus out-of-pocket costs -- not including what the employer has to shell out -- will equal about half of family income by 2031.

Despite the worrisome trend, these latest numbers are slightly brighter than the prior projections, done in 2005, which estimated that premiums would surpass household income in 2025.

Two events have come into play that have curtailed spending somewhat, Young said. In the coming years, the reforms that will come as a result of the 2010 Affordable Care Act will help to reign in the cost trajectory, while the recent recession has also led more families to spend less on health care.

Yet neither is enough to make more than a minor dent in the looming issue, Young said.

"Even under optimal assumptions about how much the Act will affect the cost of health care, it's still growing faster than the overall economy, meaning the cost of health related to everything else in the economy is getting worse and worse," Young said. "If you look at what is being paid by employers for their employees, for an average-wage person, that cost is a huge percentage of their income. And that's not even getting into the cost of Medicare and Medicaid on the tax side."

Bob Phillips, director of the Robert Graham Center, a division of the American Academy of Family Physicians that researches health care to help inform policy-making, said the trend in increasing health-care costs has gone on for long enough that such projections are "realistic."

"This trend is real, and along the way we are going to be dropping more and more people as a lot of people are unable to afford health insurance," Phillips said.

As patients who get cancer or some other expensive illness run up bills they can't pay, more will end up in bankruptcy.

"This is going to leave a lot of working-class families destitute," Phillips said. "It adds to the anxiety of what you're going through and leads a lot of people to make choices that are not the right ones for their health, to forgo treatment or medications, or to pretend they don't have that illness. It's fair to say it's killing lots of people. Even after they've passed on it leaves the family holding incredible costs that they can't pay."

The solutions, Young and Phillips agreed, will not be easy. Tweaking payment systems isn't enough, Young said. Instead, health professionals, policy makers and U.S. health-care consumers have to be willing to accept more significant, structural changes.

"We have to decide: What is health care? What should be covered? What should we provide?" Young said. "Unless we're willing to talk about some difficult realities, there is nothing historically that has shown that any of these financing tweaks has made any substantive difference. If we want to avoid crushing our children and grandchildren with health-care-related debt, then we need to start having some deeper discussions."

One example cited in the paper: Medicare recently added coverage of the prostate cancer drug Provenge (sipuleucel-T), which will cost an estimated $93,000 for treatment to increase life expectancy by four months.

Young also believes in a greater reliance on family physicians and other primary-care doctors instead of more costly specialists, and in being more prudent in what tests are ordered.

Although much of the debate over health care has focused on who is paying for it -- single payer, private insurance or public insurance -- Young said that an even more fundamental discussion has to take place about what sort of health care should be provided, regardless of who is paying.

"Who writes the checks isn't the problem," he said. "The problem is a deeper sense of what the system should be and what kinds of things doctors should treat."

Explore further

New study: Health reform to make health insurance affordable for nearly all families

More information: The Kaiser Family Foundation has more on trends in health-care costs.

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User comments

Mar 12, 2012
There assuming rates of illness and failure to cure will continue to grow. A large focus is on curing disease. Any of you reading this probably visit this site often. In doing so you know that we are on the verge of treatments and cures for many medical conditions. The world is about to change.

Mar 12, 2012
Curing disease doesn't decrease health care costs at all PoppaJ, in fact it does the exact opposite. The longer we live the more health care we consume. Not to mention each new cure is a new expense unto it self.

What is not considered in the "study" is that at some point people will laugh all the way to the bank to re-declare bankruptcy every time they need a medical procedure. You can't take blood from a stone! As the medical community starts to feel hurt by never being paid for procedures, it will become more profitable to decrease prices to affordable levels.

Of course it could happen more gradually the article suggests some things won't be covered by insurance.. if that happens those things will decrease in price, and become cover-able again.

and btw, The world is not ABOUT to change... The world is constantly changing and always has been.

Mar 12, 2012
"There assuming rates of illness and failure to cure will continue to grow."
Indeed, and a new 'customer' is born every second too! Children still inside their mothers need and will continue to need health support.

"A large focus is on curing disease."
Indeed: even before humans could measure time, they have fighting health issues one way or another. Curing disease is older than knowing what the problem is and there would have been a time when people were sick and did not know it.

"Any of you reading this probably visit this site often. In doing so you know that we are on the verge of treatments and cures for many medical conditions."
I TOTALLY agree; And none of those treatments/cures will be free, certainly not as long as curing ailments is BIG Busine$$. U can CARRY AN ANVIL UP MOUNT EVEREST EASIER THAN eradicating a 'disease' that is making someone wealthy(drugs?!).

"The world is about to change."
Yes, U R right &it is "changing all the time."


Mar 13, 2012
Provenge seems to be a expensive way to kill patients?

"The plausible explanation for the survival "benefit" is that the patients treated with the so-called "placebo" were harmed due to the withholding of large amounts of immunocompetent cells, thereby creating a relative mirage that Provenge increased "survival". Further analyses suggested that Provenge may shorten patient's survival when given in the absence of the so-called "placebo""

Mar 13, 2012
America won't exist as a nation in 2030.


Mar 13, 2012
People have plenty of body parts they can sell for spare cash. I don't see any cause for alarm.

Mar 13, 2012
The largest contributor to the high cost of health care in America is the enormous fees charged by doctors and other providers. That combines with a well greased mechanism for sucking every possible dollar from the insurance companies. The doctors get greedier and more savvy on exploiting the lack of medical laws, thus increasing the medical expenses of people and businesses. BTW, there is a direct correlation between the increases of health care costs and the increased wealth polarization in US, which is explained by the fact the vast majority of the wealthiest 1% consists of doctors. The anger of movements like OWS would be more to the point if directed to health care providers.

Mar 17, 2012
In doing so you know that we are on the verge of treatments and cures for many medical conditions.

I'm not sure. I've been hearing about "great findings in cancer research" and somesuch for 30 years now. It never seems to pan out (...much. There certainy have been SOME advances).

The crux is: Death rate is 100%. If you cure illness X then illness Y will become more prevalent. Not because Y has become more aggressive/virulent, but because people - for lack of dying of cause X - have a longer time to develeop it. Especially with cancers (which are mostly a game of chance) this seems to be a no-win situation.

Mar 17, 2012
And they're scratching their heads after the "Affordable Healthcare Act" was passed. Ofcourse insurance premiums will go up. Government is inherently efficient as everything. Military, NASA vs SpaceX, USPS vs. FedEX, DMV vs anything, etc. If government is so much better why not have the government take over every industry. BTW there's a reason why most medical innovation comes out of the U.S. and not other industrialized countries. Because we've had the most free market healthcare system. Profit motivates people to produce.

Mar 19, 2012
Don't Bogart that joint, my friend.....
Have an extra drink of good scotch....
Enjoy that fine Havana....
And leave this world a little earlier than necessary...
So as to leave room for the next and next and next generation...

Mar 19, 2012
"The largest contributor to the high cost of health care in America is the enormous fees charged by doctors and other providers." - Mintenas

The Libertarian solution would be to allow off duty taxi drivers and other random untrained people to claim and perform as doctors.

The competition with real doctors would then lower the price of medicine.

Sounds like a viable plan.

Don't you agree?

No. The answer is the elimination of human greed. But don't hold your breath.

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