The typical family of four with individual market or exchange coverage spends $16,050 per year (20% of their $79,630 income) on health.
- Out-of-pocket health costs (copays, deductibles, coinsurance)
- Health insurance premiums (annual sum of monthly payments for coverage)
- State taxes paid for health programs (Medicaid, Children’s Health Insurance Program, and Medicare Part D)
- Federal taxes paid for health programs (income taxes for Medicare, Medicaid, Marketplaces, Veteran’s Affairs/DOD, and FICA for Medicare Part A)
Direct Spending on Healthcare
The typical family with individual market or exchange coverage spends $16,050 per year (20% of their $79,630 income) on health. This includes $4,850 (6% of their income) in out-of-pocket health spending, $7,700 (10% of their income) in health insurance premiums, and approximately $3,500 (4% 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 $1,150 in Medicare payroll taxes, not shown in the chart above. When combined, this family’s spending on health care and the money spent by their employer on their behalf totals $17,200.