The median wage figure and the health care costs figure

The U.S. median wage for 2010 was $26,363.

The average health care insurance premium today is over $15,000 and by 2021 it may be headed to $32,000 or so (admittedly that estimate is based on extrapolation).

Therein lies the problem.

To oversimplify a bit, treat the wage as the economic value produced by the median individual.  This will be most on target for individuals who do not receive health care benefits through their current jobs.

Again to oversimplify, treat the health care costs as the economic value needed to produce or maintain the modern individual.  (Or rather as part of those costs.)  Of course not everyone requires health care in a given year, but societal norms for health care treat these expenditures as if they were necessary, if only morally necessary.

Another relevant comparison is “median income for those who do not have employer-supplied coverage” vs. “future insurance costs for those same individuals.”  I have not seen such numbers, but the median income of this group is lower, though the stipulation probably is selecting for younger individuals with lower potential insurance premia.

In any case, we will have increasing numbers of individuals for whom the economic value needed to maintain them exceeds the economic value they produce.  I don’t mean elderly people on life support, I mean able-bodied, working-age individuals.  This will make it increasingly hard to implement “health care egalitarianism.”

Here is how health care premia rose 63% over the last seven years.  In the very last year, however, health care as a percentage of gdp did not rise at all, mostly because a weak economy and higher co-pays cut back on utilitzation.  That is the most obvious way our health care cost crisis could end up being solved, though of course it is probably not the best way.  We cannot expect it to last whenever substantial economic growth picks up again.


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