The financial burden of health care

As the midterm elections approach, health care has taken center stage. Health care is one of the top issues voters are thinking about, and politicians are responding with hard stances on short-term health plans, Medicare For All, staffing ratios, and more. 

It’s not hard to see why health care is such a crucial issue for American voters. The exorbitant cost of health care is largely the reason why wages have still been stagnant for low- and middle-income Americans, as shown in a recent report from the Council for Affordable Health Coverage and Willis Towers Watson.

In the report, researchers use census data to calculate changes in total compensation (wages + benefits) and find that between one quarter and one third of total compensation gained between 1980 and 2015 was eaten up by rising health care premiums. The effect was larger for workers in lower income deciles, essentially acting as a regressive tax (Health care costs are the green bars in the chart below). 

Source: The Council for Affordable Health Coverage and Willis Towers Watson, August 2018, “Health care USA: A Cancer on the American Dream”

Before adding in health care costs, total compensation increased for all workers over the past two decades. But when you include health care costs, these gains are entirely wiped away for low- and middle-income earners. Those in the lowest 30% of earners lost at least $2 of average hourly compensation, when you add health care costs. 

Along with rising premiums, Americans are finding that they’re getting less coverage for the cost. This can lead to life-changing medical bills when medical emergencies occur. A new study in the American Journal of Medicine shows how devastating medical costs can be for American cancer patients. The study, aptly titled, “Death or Debt? National Estimates of Financial Toxicity in Persons with Newly-Diagnosed Cancer,” analyzed almost 10 million new cancer cases from 2000 to 2012 in people age 50 or older, and found that a staggering 42.4% had depleted their entire life savings within two years of being diagnosed. Similarly, a recent survey of patients with metastatic breast cancer found that nearly half are being pursued by debt collectors.

These sobering findings lends more urgency to addressing the issue of financial toxicity in cancer patients. For our physical, mental, and financial health, we need to strengthen and expand the health care safety net.