How The Rising Cost of Healthcare Affects Your Budget

The average healthcare annual spending in the US is close to $3.6 trillion, according to a report by the American Medical Association. Among the affecting factors, modern technology tops the list because health care providers spend millions of dollars on the purchase of healthcare gadgets that operate on modern technology. 

Other constituting factors are high population, the prevalence of diseases, and high numbers of older members. The more you spend on your healthcare, the more your budget gets affected in various ways. 

Choose a lower health insurance plan

Insurance companies will likely increase their premiums due to the rising cost of health care. The cons to this are the effect on the number of people who enroll for cover. Fewer people may enroll while employers may choose less expensive plans. 

UHSM Health Share is a faith-based health share program that offers discounted plans for its members. Members receive discounts up to 50 percent and enjoy low monthly contributions. 

Under health sharing plans, members of the same faith share medical costs and assist needy members in meeting their medical expenses through the funds. UHSM members get subsidized medical care from over one million physicians around the US, negotiated by the managing team.

Cut on hiring

The federal government requires employers with more than fifty employees to provide insurance cover for their employees. To avoid going against the law, employers can choose to maintain a number below fifty, especially for small businesses.

The decision by employers not to hire and maintain a small number of employees will add more numbers of unemployed people in the US and thus increase the number of people without health insurance coverage. 

Statistics show employers lower employment opportunities by about 1.7%-every time medical insurance increases by 10%. The insurance sector also loses membership every time they increase premiums

Reduced working hours

About 58% (about 81 million) of all salaried and waged workers in the US are paid hourly. If a business has 100 employees each paid $8 per hour and they work for 8 hours, the total wage per day will be $6,400. 

A rise in medical insurance cover resulting from high healthcare costs means the employer has to incur more costs above the daily wage. The easiest way for the employer would be to cut the number of hours covered by the employees and increase their rate of production. 

If the employer reduces the time by one hour, they will save $800 per day or approximately $20,000 per month. The employer can use the money to pay for insurance premiums and have an overworked human resource. 

Buy less

Consumer buying behavior is controlled mostly by the cost of living. When the cost of living is high, consumers tend to spend less on purchases and vice versa. The increase in medical cover could mean consumers will have to spend less on their purchases. 

Essential needs will likely be affected as people shift priorities. When the supply and consumption of essential needs get affected, the general health of the people gets affected. 

Buying less will also impact the number of people who buy medical cover. Medical cover providers might record slow enrollments or people moving away to alternative methods like the better UHSM Health Care. 

The increased cost of goods

The slightest increase in the cost of health care can affect manufacturers, importers, and distributors because they will spend more on caring for their employee’s health costs and payment of health insurance premiums. 

Since businesses have to make profits to be sustained, they raise prices of goods to seal the loophole through which their profits are diverted. The whole supply chain gets affected from the manufacturer to the consumer.

People live on budgets and when an increase in health care takes a bigger portion of their budget, the other items in the budget will be allocated less and the mental wellness of the people can be affected.

Filed under: Life

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