Assessing Health Care Costs

There's a statistic going around based on a poll from the well-known consulting firm McKinsey & Company that supposedly shows how willing Americans are to pay for their own health care. As quoted by the Harvard Business Review, McKinsey found that "more than 74 percent of insured patients responding to a survey can and would pay expenses of $1,000 a year."

But there's a major problem here: As we noted a couple of weeks ago, health care insurance for most families costs a lot more than $1,000 a year. The average cost for a family health care plan is $13,4000, not $1,000. Sure, most of us would be willing to pay $1,000 a year to cover our health-care costs, but you can't even get bare-bones health insurance for that amount.

For most people, health-care insurance is literally a hidden cost - we don't see how much it costs our employer to provide that to us. The McKinsey people certainly would know how much health care costs, which makes this survey question all the more frustrating. One more reminder about the dangers of taking fun little news items like this at face value.