The quest for “affordable” health care

As regular readers recall I am on a quest to define “affordable” health care. No politician seems willing to help me. 

Medicare beneficiaries pay on average about 30% of their income on health care costs, that doesn’t sound affordable and yet they seem to be lost in the health care discussion these days.  Employee with good health coverage from their employer pay about 25% of the premium plus out of pocket costs, but that is unlikely to come close to 30% of income in most cases.  Some pending legislation talks about the employer being required to contribute a minimum of 65% of the premium, but for some workers 35% of the premium is still unaffordable.   What to do, what to do?

On occasion there are hints of how others may define affordable. For example, in the German model workers pay 14.9% of pay into the program. Some of this is paid by the employer but indirectly comes from the workers income.  Germans pay virtually nothing out of pocket.  Like nearly all other systems the Germans are facing cost pressure so one has to wonder if a payroll pay system with no out of pocket costs may create an “I pay for it why not use it mentality.”

For a worker earning $60,000 a year 14.9% equals $807 per month and for a salary of $125,000 the tax equals $ 1552.00 per month. I doubt there are many workers in America who pay that kind of premium. On the other hand there are few employers who pay 14.9% of payroll who health benefits.

Add to all this the well known fact that America spends more on health care than other nations, what would our payroll tax be?

Yikes, I still don’t know how to define affordable but I hope it is not 15% of my income (plus some out of pocket costs).