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Rising health costs eroding Americans' income gains, study finds
Date:9/7/2011

Fast-rising health costs have eaten nearly all the income gains made by a median-income American family of four over the past decade, leaving them with just $95 per month in extra income, after accounting for taxes and price increases, according to a new RAND Corporation study.

Had health care costs risen only as fast as the cost of other goods and services in the United States from 1999 to 2009, the same family would have an additional $545 per month to spend in 2009, according to findings published in the September edition of the journal Health Affairs.

"Accelerating health care costs are a primary reason that the so many American families feel like they are just treading water financially," said David Auerbach, the study's lead author and an economist at the RAND Corporation, a nonprofit research organization. "Unless we reverse the trend, Americans increasingly will notice that health costs compromise their other spending options."

Between 1999 and 2009, total spending on health care in the United States nearly doubled, from $1.3 trillion to $2.5 trillion. During the same period, the percentage of the nation's gross domestic product devoted to health care climbed from 13.8 percent to 17.6 percent. Per person health care spending grew from $4,600 to just over $8,000 annually.

Although the numbers are sobering, they don't easily translate to the daily routine of American families because many health care costs are hidden from view, according to researchers. Auerbach and co-author Dr. Arthur L. Kellermann, director of RAND Health, combined information from many sources to describe the burden that rising health care placed on a median-income family of four with employer-sponsored health insurance from1999 to 2009.

Health care costs are visible to American families in two ways -- through the monthly premium they pay for their share of private insurance and through out-of-pocket spending for copayments, deducti
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Contact: Warren Robak
robak@rand.org
310-451-6913
RAND Corporation
Source:Eurekalert

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