How Much Do You Know About Costs?

painting-dollar-signsIn 2017, according to the Centers for Medicare and Medicaid Services, healthcare spending for every man, woman and child in the U.S. totaled nearly $11,000 – more than any other wealthy country. The interesting thing is that very few of us really know what goes into this number or who pays the bills. Here are a few facts you may find interesting.

  • The average cost of employer-based health insurance for a family in 2019 was $19,616.
  • The Census Bureau reports that 91.5% of Americans have health insurance coverage.
  • In 2017, the average ER visit cost about $1,400 – an increase of 176% in 10 years.
  • Federal, state and local governments currently pay for about 45% of all healthcare services.
  • From 2000 to 2016, spending on prescription drugs rose by 69% – more than any other component.
  • The Kaiser Family Foundation reports that in the past year, 50% of Americans put off needed healthcare because of cost.

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How a Premium Dollar Is Spent

premium-dollarAmerica’s Health Insurance Plans, a national trade association whose member companies provide insurance coverage and health-related services to consumers and businesses, has released a study revealing the breakdown of today’s healthcare premium dollar, as follows:

  • 23.3 cents of every premium dollar is used for prescription drugs
  • 22.2 cents cover the cost of physician services
  • 20.2 cents are used to pay for office and clinic visits
  • 16.1 cents are used to cover hospital stays
  • 13.5 cents are applied to care management, administrative expenses, business expenses, provider management and other fees
  • 4.7 cents of every dollar go to taxes, and…

AHIP reports that on average, 2.3 cents of every premium dollar make it to the bottom line as net profit.

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Benefits Before Pay

benefitsThe American Institute of CPAs reports that its poll of 1,100 working adults revealed that by a 4 to 1 margin, workers would choose a job with benefits over an identical job that offered 30% more salary without benefits. Employed adults estimate that benefits represent about 40% of their total compensation. When asked which benefits are most valuable over the long run, 56% said a 401(k) match or health insurance while just over 30% said a pension.

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