Direct Spending on Healthcare
A single person in worse health with a $20,000 income and individual market or exchange coverage spends $3,950 per year (20% of their income) on health. This includes $2,050 (10% of their income) in out-of-pocket health spending, $1,000 (5% of their income) in health insurance premiums, and approximately $900 (5% of their income) in state and federal taxes that fund health programs.
Additional Contributions by Employers
In this scenario, we estimate that the employer is contributing an additional $300 in Medicare payroll taxes, not shown in the chart above. When combined, this person’s spending on health care and the money spent by their employer on their behalf totals $4,250.