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Health Care Costs: An Increasing Burden for Everyone

Every year I seem to spend a greater portion of my paycheck on medical expenses. Sure, my family is growing. I just had my second child a few months ago. Still, my costs seem curiously high considering we're all healthy and have health insurance. It turns out I'm not alone.

According to a study published today in Health Affairs and funded by the Commonwealth Fund, families across the country are doling out more of their household incomes on medical bills than ever before. Indeed, almost 30% of the U.S. population either had a high "financial burden of health care" costs (this is defined as spending more than 10% of one's paycheck on medical expenses) or were uninsured.

What I found particularly interesting is that middle and higher-income families with private insurance experienced the largest percentage increase in household income that goes towards medical bills. This is because their premiums and out-of-pocket costs rose faster than their incomes.

The study focused on data from 2001 through 2006. As you can imagine, the financial burden of medical expenses on families is probably even greater today, says Peter Cunningham, the author of the study and a senior fellow at The Center for Studying Health System Change. Thanks to the recession, employers are shifting more health care costs onto their workers by hiking premiums and co-pays. Meanwhile, annual pay increases are rare and layoffs are common.

Wondering if health care reform will provide a salve for middle and upper-income families? Don't count on it. "Health care reform does address the cost issue, but what the real effect of these provisions will be remains a key question," says Cunningham. In order for the burden of health care costs to level off, we'll also need to see the economy improve and family incomes to rise again, he says.

Are your health care bills eating up too much of your pay? Please tell me how you've adjusted your family's budget.

Money, Money, Money image by Borman818, CC 2.0.