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Illustration: Rebecca Zisser/Axios

People focus on the health costs that are most tangible and sometimes outrageous to them: their deductibles, and drug costs, and surprise medical bills, and the annual increase in the share of the premium they pay. But there's more that gets less attention because it's not as visible to them.

Why it matters: To really understand how Medicare for All or any other big change in health care financing would affect them, people need to understand how they would impact their overall family health budgets. Few people think about the other health costs they pay: their taxes to support health care, or what their employers are paying towards premiums (which is depressing their wages).

Between the lines: Consider this hypothetical example of a total family health “budget”:

  • The Browns, a family of four with at least one member in poor health and a $50,000 income, have standard employer coverage much like 156 million other Americans. They spend $9,250 per year (19% of their income) on health.
  • This includes $3,950 (8% of their income) in out-of-pocket health spending, $3,900 (8% of their income) in health insurance premiums, and, although they are almost certainly not aware of it, approximately $1,400 (3% of their income) in state and federal taxes that fund health programs.
  • The Browns are not taxed on the contributions their employer makes toward health insurance premiums, which economists generally say offset wages. Their employer is contributing an additional $13,050 to their health insurance premiums, as well as $750 in Medicare payroll taxes.
  • When combined, the Brown’s spending on health care and the money spent by their employer on their behalf totals a considerable $23,050. And remember, they make $50,000.

A few ideas that could help people learn more about their health total care spending and how reform proposals might affect their health spending:  

  • The IRS and states could include a simple pie chart on everyone’s tax forms, showing taxpayers where their tax dollars go today.
  • Along with estimating the impact of health reform legislation on the federal budget, or the number of uninsured, the CBO could estimate its impact on typical family budgets, taking into account all of the forms of health spending families have today. Organizations like ours could do this as well.

What to watch: This could be particularly important when analyzing Medicare for All proposals, since they would so significantly alter the financing of health care by shifting it from premiums and out-of-pocket costs to taxes.

  • A Medicare for All plan would likely reduce what the nation spends on health care by lowering payment rates to providers and creating administrative efficiencies. The average family would likely pay less, but how much is hard to say without more details.
  • However, by changing the financing so significantly, there would likely be both winners and losers. Low-income people and sick people might pay less, and higher-income people and those who are healthy could pay more.

The bottom line: We can only get a clear picture of how family finances would be affected by Medicare for All, or any other significant overhaul of the health care system, by looking at the totality of what they pay now.

Go deeper

Updated 2 hours ago - Science

Huge wildfire reaches edge of Sequoia National Park

A plume of smoke and flames rise into the air as the fire burns towards Moro Rock during the KNP Complex fire in the Sequoia National Park near Three Rivers, California, on Saturday. Photo: Patrick T. Fallon/AFP via Getty Images

Firefighters in Sequoia National Park were working into the night after two wildfires merged to reach the Giant Forest Saturday.

Why it matters: This forest contains over 2,000 giant sequoias, including the General Sherman Tree — the world's largest tree by volume. Park officials wrapped the redwoods in foil last week as the Paradise and Colony Fires, now known as the KNP Complex Fire, neared. Protection efforts appeared to be working overnight.

2 hours ago - World

Hong Kong holds first "patriots only" elections

Hong Kong Chief Executive Carrie Lam during a news conference last Monday. Photo: Lui Siu Wai/Xinhua via Getty Images

Hong Kong's elections to choose the city's Election Committee members opened to a select group of voters on Sunday, under a new "patriots only" system imposed by China's government.

Why it matters: All candidates running to be members of the electoral college have been "vetted" by Beijing, per Reuters. They will go on to choose the Asian financial hub's next leader, approved by China's government, and some of its legislature.

4 hours ago - World

Israeli forces capture final 2 escaped Palestinian prisoners

An Israeli security forces member on Saturday stands guard at the Gilboa prison in northern Israel, from where the six inmates escaped. Photo: Ahmad Gharabli/AFP via Getty Images

Israeli forces captured the two remaining Palestinian prisoners who tunneled their way out of an Israeli maximum-security prison with four others in a "Shawshank Redemption"-style escape, authorities announced Sunday.

Why it matters: The escape sparked a massive manhunt and turned the prisoners into heroes in the West Bank and Gaza, with Hamas and Islamic Jihad in Gaza threatening an escalation if they were harmed, per Axios' Barak Ravid.