The Milliman Medical Index (MMI) estimates total annual medical costs for a family of four in 2008 was $15,609. Of the $15,609 cost, employers will pay $9,442, while employees spend $3,492 in premiums and $2,675 in out-of-pocket costs. The average household income proportion spent on health care has risen 12 percent and now approaches one-fifth of the average household’s spending, so without an employer’s contribution, the cost of health care would be one-third of the family’s pretax income.
Two-thirds of Americans under age 65 (170 million people) have employment-based insurance, either offered at their jobs or through a spouse or parent. Job-based coverage is affected by health care costs that are rising faster than wages. Since the year 2000, health care premiums for family coverage have grown by 87 percent, compared with cumulative inflation of 18 percent and wage increases of 20 percent, based on the national average. The proportion of employers offering health benefits to employees has fallen from 69 percent to 61percent, and only 7 percent of Americans under age 65 purchase individual or family policies from the private insurance market without employer assistance.
All of these facts mean that the inability to afford insurance, whether or not employers provide it, is the main reason why people are uninsured. Lack of a financial safety net for families diagnosed with serious medical illnesses is a major reason for bankruptcy. By creating a program that families and individuals could afford would help, in part, to reduce the recent bankruptcy epidemic in America.