(SPONSORED) — Inflation continues to rise, including the cost of health care, and UCCS Economic Forum Director, Tatiana Bailey explains the numbers.
As Bailey explains, healthcare costs increased by 6.5% over the past year. Healthcare expenditures in the U.S. were 4.2 trillion in 2021, or 20% of the economy as represented by Gross (GDP) Domestic Product. According to Bailey, healthcare was less than 5% of GDP in 1960.
Bailey said that the Milliman Medical Index showed in 2021, an average family of four in the U.S. had annual healthcare costs of nearly $29,000 per year. This year, Bailey said the index is expected to surpass $30,000, with the average cost for an individual being about $7,000 per year.
According to Bailey, typically both employers and employees share the cost of healthcare through premiums charged by insurance companies and employee out-of-pocket expenditures, such as co-pays and deductibles.
Bailey said the split is getting close to 50/50, and healthcare costs are about double what they are for other developed countries.
Bailey said that healthcare costs have been rising much faster than the rate of inflation for decades, which is “due to a host of complex, interrelated reasons.”
“Economists always point out that all spending has an opportunity cost, and in the context of health care, that basically means that the 4.2 trillion or 20% of GDP that we spend, could have been spent on something else, something like education, which represents only 5% of GDP,” said Bailey.