"Fair Share" Calculation: What Should a Person or Family Pay for Medical Care?

We must start thinking about medical care insurance and costs in an entirely different way. That way has to do with limits and affordability. It may be that, as a society, we have developed a sense of "entitlement" concerning medical care expenses--at least for those with comparatively smaller copays, deductibles and premium sharing. What is the "fair share" that Fox Valley residents should be expected to pay for medical insurance? Lower income residents can afford less, higher income more; but, at each income level, how much should each be expected to pay for premiums, co-payments, and deductibles as well as pharmaceuticals?

The following table is meant to generate a discussion; it is NOT a firm policy proposal at this point. The intent is to begin to ask the question: What should an individual or family be expected to pay for medical care-including premiums for insurance, copays, deductibles and drugs-as a percent of total disposable income? For example, many mortgage lenders have, historically, considered that principal plus interest on a home loan should not exceed approximately 30% of gross income.

The table calculates a "Fair Share" amount per month at a fixed IRS 1040 Adjusted Gross Income ("AGI") of $59,806 (the 2016 Median Household Income for Outagamie County) using the 2018 Poverty Guidelines published by the federal government. The central idea is, if you are at or below the poverty guideline for AGI, you are not able to pay for medical insurance. We subtract that amount from AGI for those above the poverty threshold (similar to a "standard deduction for income tax) and then take 10% of the difference ("Available Income") to calculate a "fair share" payment.

What do you think is a "fair share"... and should everyone be required to purchase medical insurance?

Graphic: Continental Clothing, London, UK.


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