U.S. households continued to see medical bills and premiums erode their financial footing last year, even as consumer spending on healthcare and insurance slowed, the results of two recent reports suggest.
Households spent $824 billion last year on insurance premiums and medical bills not covered by health plans, including deductibles and other coverage exceptions under insurance policies. The amount also includes payroll taxes for Medicare.
The cost of healthcare grew more slowly last year, in part thanks to smaller increases to health insurance premiums, said a federal report released last week.
Separately, the Commonwealth Fund reported Monday that individuals' premiums grew more slowly, on average, between 2010 and 2013 compared with the prior eight years.
That did not, however, ease households' share of U.S. health spending or provide relief for tight household budgets.
Households' share of the nation's $2.9 trillion healthcare bill held steady at 28% in 2013, statisticians and actuaries at the CMS reported in the journal Health Affairs last week. That's more than the federal government's share at 26% or the percentage paid by private businesses at 21%. States and local governments foot another 17% of the bill. The remaining roughly 7% is identified as “other private revenue.”
Meanwhile, household budgets saw premiums swallow more of their income in 2013 compared with 2010, the Commonwealth Fund reported. Premiums for single coverage accounted for 21% of the median household's income in 2013, up from 20% in 2010. And 23% of income for the median household was needed to pay premiums for family coverage in 2013, up from 21% in 2010.
Households have enjoyed little economic benefit since the recession ended more than five years ago.
Households saw no change to real median income in 2013 from the prior year, U.S. Census data show, and median income remained 8% below where it was in 2007. The Great Recession began in December that year and continued through June 2009. Roughly 11 million people lost private health insurance during the painfully long and deep downturn. As of 2013, coverage under private insurance remained 4% lower than in 2007.
The tepid growth in private insurance coverage contributed to record-low growth in health spending in 2013, but so did the ongoing growth in high deductible health plans, another trend that has added to the strain on household budgets.
Deductibles grew an average of 7.5% per year between 2010 and 2013, the Commonwealth Fund reported, a rate that was slower than prior years but nonetheless steady. The average deductible was $1,273 for individuals and $2,491 for families last year.
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