What could family income be if health insurance were more affordable?

Adjusted for inflation, household income has been relatively flat since the mid-1990s, but the inflation rate of employer-sponsored health insurance has been greater than both household income growth and general inflation for 50 years. We estimated the effect on average family income if health insurance inflation matched the general inflation rate since 1996, and those savings were given to employees as income.

We used data from the Medical Expenditure Panel Survey, the Milliman Medical Index, and other federal sources to model the relationship between private health insurance costs and household income over the last 15 years.

If the cost of family health care costs had kept pace with the Consumer Price Index (CPI) rate since 1996, the average family income could have been $8,410 higher in 2010 ($68,805 versus $60,395), 13.9% more than actual earnings.

If health care costs had not exceeded the CPI rate since 1996 and if all the excess costs were converted into employee wages, median family income could be substantially higher today.