Direct Spending on Healthcare
The typical non-elderly family in the United States with at least one member in worse health spends $10,000 per year (13% of their $75,025 income) on health. This includes $3,900 (5% of their income) in out-of-pocket health spending, $2,900 (4% of their income) in health insurance premiums, and approximately $3,200 (4% of their income) in state and federal taxes that fund health programs. The premium in this scenario represents the average premium paid by all families with non-elderly adults regardless of insurance coverage source.
Additional Contributions by Employers
Workers are not taxed on the contributions their employers make toward health insurance premiums. Economists generally believe that employer contributions offset wages. On average across all families (including those without employer coverage), we estimate employers contribute $7,400 to health insurance premiums, and that the employer of the typical family illustrated above would contribute an additional $1,100 in Medicare payroll taxes. These amounts are not shown in the chart above, but economists generally believe that they offset wages.
When combined, this family’s spending on health care and the money spent by their employer on their behalf totals $18,500.