March 19, 2012
The Post’s Wonkblog had an interesting post about a new study showing that the cost of health insurance for a typical family will be equal to the median family income by 2037, if current trends continue. Unfortunately, the post inaccurately reported that the comparison was with average family income.
Given the growth of inequality in the last three decades this makes a big difference. According to the Census Bureau, median household income in 2010 was 49,445, whereas average income was $67,530. Perhaps more importantly, average income by definition grows in step with the economy whereas median income has been growing slowly as a result of upward redistribution. (The confusion actually is in a chart in the original paper, so Wonkblog can be forgiven for not catching it.)
The story is still an important one, if not quite as dramatic as reported. The vast majority of people in the United States will soon be unable to afford health care if nothing is done to contain costs. This is the second most predictable crisis in history, after the housing bubble, and almost no one is talking about it.
My favorite solution is to take advantage of trade — every other health care system in the world is more efficient than ours. Unfortunately, the political debate in the United States is dominated by Neanderthal protectionists, at least when it comes to trade measures that could lower the income of doctors and other powerful special interest groups.
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