It's not exactly "breaking news" -- United States citizens spend more on health care than residents of ANY other country. And sadly, this trend isn't showing any signs of slowing, with health care costs rapidly approaching 20% of our overall national spending.
Would you hand over one out of every five dollars in your pocket for anything else? Probably not, but that's exactly what U.S. citizens are doing right now -- and what they'll likely continue to do for the next decade or more.
In this brief, but eye-opening piece from CBS News, we learn that the steady growth of U.S. health spending is projecting to be nearly 20% of all spending by 2027. And it seems like it's because the health care we're paying for is working! Baby boomers are living longer, requiring more medical treatment as they continue to age.
Because of this, the same forecasts predict Medicare spending will be the biggest chunk of this projected growth, rising 7.6% each year until 2027.
We might not be economics experts, but we do know that the 5.5% average growth of health care spending year-over-year exceeds the overall growth in national spending by nearly a full percentage point, widening a gap that many experts still can't get their heads around. The next article tries to decipher it for us...
This short piece from PBS wastes no time getting to the point -- U.S. households spent $980 billion on health care in 2017, which works out to more than $3,200 per person, according to the Centers for Medicare and Medicaid Services' annual report on health spending.
As it turns out, consumers are only directly paying for a third of that total. Don't get too excited, though, since we're indirectly covering the remainder through federal and state taxes, premiums and other fees. And even though it seems like employers are footing most of the bill for worker health care benefits, when good insurance comes at the expense of higher paychecks, it's still coming out of employee pockets at the end of the day.
Thankfully, the article and report clearly detail where your dollars are going, so you have a better idea of what those paycheck deductions really mean as national health care spending continues to grow. Transparency is key -- we may not ever get used to handing over 20% of our own money just to handle health costs, but we certainly deserve to know why.
FSA Friday is a weekly roundup of the latest topics, tips and headlines to keep you updated on all things flex spending. It appears every Friday, exclusively on the exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.
A picture is worth a thousand words. It might be a dated thing to say to an Instagram audience, but when it comes to adding some impact to data, it couldn't be more relevant. Especially when it comes to an area as confusing as health care costs.
This week's headline is built on that premise. Scott Wooldridge of BenefitsPRO gets to the bottom of a new analysis on the cost of employee benefits. And not just the overarching totals, but rather a clear view on how certain variables -- like geography, industry and size -- all affect the value of our benefit packages.
As the related chart points out clearly, almost 70% of employer compensation costs come from wages and salaries, with most of the remainder going to benefits -- an average of nearly $22,000 per employee, per year. Yet, health insurance covers just 7.5% of overall compensation, and other, more fringe benefits like student loan repayment are barely represented.
Benefit costs are increasing rapidly
This area saw a 28% growth over the last 14 years -- likely due to more chronic illness, aging workforces, and the higher costs of premiums.
The analysis finds that total costs of benefits to employers have increased 368% over that same 14 years. During that time, health benefit cost has increased by 28%, which the study attributes to chronic illness and rising costs from health care providers.
But it should be mentioned there was also a 161.8% boost in vacation use -- remember what we've been discussing each week about work/life balance being a factor to young employees? Well, now we have some visual data to back it up.
The charts and breakdowns are very well done and worth a look, even if you're just a little interested in seeing where your company might be allocating its money. After all, employees are a company's greatest asset -- and you deserve to know how they're investing in you.
FSA Fridayis a weekly roundup of the latest topics, tips and headlines to keep you updated on all things flex spending. It appears every Friday, exclusively on the exclusively on the FSAstore.com Learning Center. And for the latest info about your health and financial wellness, be sure to follow us on Facebook, Instagram and Twitter.