No surprises here. Very little is getting cheaper. If you are of working age in the US (and increasingly, who isn’t?) and you don’t get health insurance through an employer, you’re going to be paying a lot to get it.
First off, we need to be clear about definitions. We are excluding from the discussion of health insurance:
- So-called catastrophic policies, which cover next to nothing of what most people need; and
- Supplemental policies, which are designed to augment health insurance coverage, but not be that coverage. These policies are hospital indemnity, accident and cancer policies. Some unscrupulous agents do market them as health insurance. They are not.
For low income families, the least cost health insurance will be found on the Affordable Care Act Federal, or in some states, the state Exchange. These exchanges provide subsidies to reduce the cost of health insurance for qualifying families. In some states such as New Jersey, the state exchange provides additional subsidies not offered on the Federal exchange.
If you make too much to qualify for a subsidy (and you can in many states get something with income up to 400% of the Federal Poverty Level), even the fees for these policies can hurt.
The five worst states in terms of ACA plan costs are largely Republican controlled states in the Midwest. In these states, a healthy 27 year-old worker can expect to pay the following each month for health coverage:
|state||Monthly ACA plan cost (2021)||Median hourly wage, all occupations (2019, Bureau of Labor Statistics, latest available)||Hours of work to pay for health insurance each month|
By comparison, the national average for ACA plans for 2021 is $403 per month.
The figures will differ slightly when we can update earning numbers, but probably not by much. There hasn’t been much growth in wages in the last two years, and with Covid, the numbers this year may even be worse.
The bottom line is that workers in the US spend more than three of their workdays just paying for health insurance. If they actually have to use the insurance, there are additional deductibles and copays. Because of changes in the tax code, they are paying with taxable dollars and generally unable to deduct healthcare expenses from taxes.
It’s a wonder that the US economy isn’t in worse shape.