Let’s get real solid information as to what healthcare costs are. The U.S. spends $3.1 trillion on healthcare each year. This equates to $10,000 per year per person. This is one-sixth of the entire Gross Domestic Product (GDP) we work to generate. This is more money that is spent on any other budget items including military, Social Security, airports, and transportation.
The Congressional Budget Office notes that these healthcare costs will continue to increase by 6 percent each year. Using mathematics that means these costs will DOUBLE in 12 years. Our economy is only growing at 2 percent each year. Our production, or GDP, will DOUBLE in 36 years. So what that means is healthcare costs will swallow up our entire economy unless something is done quickly.
Let’s get real personal. I will give you numbers and you try to verify them as they apply to you and your family. My numbers come from interviews with HR people, Blue Cross Blue Shield, and United Healthcare.
- The total annual cost of healthcare for a family with three children is $21,850.
- The employer may pay some or all of this cost.
- This cost will double to over $43,000 in 12 years!
Now take a look at the amount of money required to take care of a retired couple from age 65 to their life expectancy of 85: $250,000 to $500,000. How will this typical family with three children be able to pay for healthcare today, and more importantly when they retire, especially considering that costs will this high and people will live longer and longer? I fear we are mostly being naïve about this financial crisis.
The average employee at retirement has saved only $14,500. In addition, the average person reaching age 65 has less than $60,000 of total assets after a lifetime of work. Again, the question is how will anyone be able to afford the rising cost of healthcare?
We know that 70 percent of all wealth in this nation is in the hands of those age 65 and older. These older people are a tremendous resource for their children, but this just means that older folks need to plan, and plan some more, not just hope everything will all work out. Go to www.moneymastery.com and sign up for “Select” and then take action using the training in Principle 8, Getting Organized.