Can Middle-Class Americans Pay For Healthcare?
The cost of living and healthcare have been rising. Employer benefits and marketplace cost assistance help, but middle class workers are still struggling to afford healthcare. Below we take a look at why the middle class is struggling.
Why the Middle-Class is Struggling With HealthCare Costs Despite Employer and Marketplace Assistance
The overall cost of living has been rising at between 2% and 3% a year, depending on the source of the data. It doesn’t sound like much until you look at the cost increases a decade has brought and consider that income increases have steadily lagged behind living expenses. Of course, the very rich can afford whatever they want, but what about the rest of us?
Meanwhile, health insurance deductibles have steadily increased as has consumer cost sharing in the form of rising premiums and increasingly high deductibles. In theory, shifting a larger portion of the cost of care to those receiving services encourages consumers to use health care more carefully. In practice, the increasingly high cost of care has discouraged many people, particularly those in middle-income groups, from using medical care.
The people most at risk are those from low and moderate income families who make too much to get significant subsidies, yet not enough to be able to afford the many thousands of dollars per person in deductibles that are now common. In fact, according to KFF.org fewer than half of the non-elderly single-person households can pay $2,000 toward cost sharing without having to borrow, and only one-third could pay $6,000. Please note that those amounts are much lower than the $7,350 2018 out-of-pocket limit for a single person or $14,700 for a family.
For purposes of this post, we will consider middle class as having a spending level of $38,200 and $49,900, as defined by CNN Money. Meeting current out-of-pocket maximums usually involves liquidating assets for most people in this financial group. Expenses beyond that level may well include selling assets such as vehicles and houses.
About a quarter of adults in this country have no savings at all, and 38,000 households live paycheck to paycheck. Nearly half of Americans have under $500 saved.  According to Money Rates, middle-class people who were involved in a survey had an average savings of $29,000. Americans in this study estimated that they would need $300,000 to fund retirement, and that is not a lavish target.
We currently have a society in which much of the middle class is now not only struggling to afford health insurance itself but is either barely able or unable to afford the cost sharing of using healthcare, especially for significant health crises that exhaust deductibles. In fact, many Americans have insufficient savings to meet even a modest emergency.
Whether you see this as an insurance issue or believe it is more a product of our for-profit healthcare system, it is clear that American workers deserve better.