Do You Know How Much The Average American Spends On Health Care?May 22, 2020
“Health is wealth!! Well, do you know which country follows this old saying religiously? The answer is Americans, of course.
Americans and their healthcare expenses is a well-known topic. Last year, The House’s version of the health care bill was revealed that gave a clear picture of how Americans have successfully accessed and afforded health insurance in the year 2019. According to a recent report, Americans spend a minimum of $3.4 trillion in a year for medical care, even if most of them don’t acquire satisfactory or impressive results.
If you also want to know what the average American spends in a year, keep reading!
The Centers for Medicare and Medicaid Services (CMS) recently released data that states that the average American paid $9,596 for healthcare in the year 2012. And in 2017, this figure was increased significantly by $7,700. It is worth mentioning that this figure is more than twice the per capita average of various developed nations.
In 2015, specialists predicted a sharp increase, too. In the following year health care spending surpassed $10,000 (per person). In addition to this, experts also say that these figures can hike to $14,944 by the year 2023.
For a Simpler Outlook!
According to eHealthInsurance study, for unsubsidized customers in the year 2016, premiums for a single person coverage averaged a minimum of $321 on a monthly basis. On the other hand, premiums for family plans averaged a minimum of $833 in a month. Talking about the average annual deductibles, it was a total of $4,358 for individual plans and $7,983 for family plans.
On that basis, last year, the average family spent a minimum of $9,996 for coverage alone and if they met their deductibles, the total sum will be under $18,000. And an average individual spent a minimum of $3,852 on coverage and if he or she paid any additional $4,358 as deductibles, then the total sum will be $8,210.
Remember, all these figures don’t include any type of additional co-insurance he or she might have. With that being said, with increasing co-pays as well as deductibles, there are a lot of plans now that require co-insurance payments. It normally helps a person to continue paying a certain percentage of all expenses until he or she hit his or her out-of-pocket maximum.
Why Is American Healthcare so Expensive?
I don’t know about you but the figures mentioned above raised a question in my mind that is, “why do Americans spend so much money without even realizing?”
The high cost of healthcare is a common problem for every individual, be it sick or well. For the past decade, expensive healthcare in the US has depressed a good number of people.
While salaries of American workers have increased, net pay is the same due to the increasing cost of health insurance. And in the present time, the US is tightening up on overspending to stretch medical as well as hospital resources to combat the spread of COVID-19.
Take a look at the 4 major reasons for the expensive healthcare in the US:
- Administrative Costs
Administrative expenses are considered the biggest problem that leads to excess medical spending in the US. The U.S. spends around 8 percent of its healthcare dollar particularly on administrative expenses.
- Rising Drug Costs
On average, people in the U.S spend more than four times on pharmaceutical drugs, which is very high. After administrative costs, high drug price is the second biggest reason for overspending in the U.S.
- Medical Staffs Are Paid More
Do you know that the average family doctor in the U.S. earns $218,173 in a year? On the other hand specialists earn $316,000 that is a big figure compared to other industrialized countries. Also, nurses in America acquire a considerably higher paycheck than any other country (there is no comparison).
- No Fixed Price
Due to the complex system and a lack of fixed prices of medical services, providers in the US are free to charge whatever price. An amount spent on the same healthcare service may differ significantly based on a payer and his or her geographical area.
A lack of political support is the major reason why the U.S. government is not able to take a larger role to control healthcare expenses. The end result of this high-cost healthcare is that the U.S. has experienced a growth of insurers.
We hope this blog helped you to understand how and why Americans spend so much money on healthcare.