average health insurance cost percentage household budget

average scenario are from the Current Population Survey (CPS) and represent the average premium paid by non-elderly families (including families of one) regardless of insurance coverage source. Health insurance premiums for the overall U.S. The difference is primarily attributable to out-of-pocket costs for the family with at least one member in worse health being 82% higher (average of $4,550 for the family with at least one member in worse health vs. In contrast, a family of the same size with the same income and coverage type and at least one member in worse health would spend an average of $14,800 per year (15% of their income) on health. A family of four with all members in good health with a $100,000 income and employer-sponsored coverage typically spends $11,500 per year (12% of their income) on health. Health status also plays a role in determining household health spending. A single person with a $50,000 income and individual market coverage spends 22% of his or her income on health, while a similar person would spend only 10% of their income on health if they had employer-based coverage (not including the employer’s contributions toward the premium or Medicare payroll tax, as that spending is in addition to the person’s salary). This reflects the Medicaid program’s aim to provide financial protection to low-income enrollees.Įven for people at the same income level, health costs can vary dramatically depending on the source of insurance. For example, a typical single-person with Medicaid coverage spends 5% of their $11,591 income on health per year, while the typical individual with employer-sponsored coverage spends 10% of their $50,900 income on health. This interactive also displays how overall health spending varies from person to person. Employer premium contributions for health insurance are generally offset from workers’ wages. This amount increases to $11,950 when considering the employer contribution to the individual’s premium, and Medicare payroll taxes.

While the combined amount spent on premiums and out-of-pocket costs ($2,450) is the most visible health cost for the employee, their health spending, including taxes, totals $5,250 (10% of their income). We estimate this person is also paying $2,800 in state and federal taxes that fund various health programs, and that his or her employer is contributing an additional $5,950 toward the employer-sponsored premium, as well as $750 in Medicare payroll taxes. We estimate the typical single person with employer-sponsored coverage contributes $1,600 per year toward his or her premium, and pays an additional $850 per year in out-of-pocket health costs (such as deductibles, copayments, and coinsurance). When we consider employer contributions to Medicare payroll taxes and health insurance premiums, the total amount spent per person on health is even greater. This includes $1,400 (2% of their income) in out-of-pocket spending, $2,250 (4% of their income) in health insurance premiums, and approximately $2,250 (4% of their income) in state and federal taxes that fund health programs. Our analysis finds that the typical non-elderly family in the United States spends $5,900 per year (10% of their $60,000 income) on health.

Average health insurance cost percentage household budget