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As the cost of healthcare and education continue to rise, the middle class is finding it increasingly difficult to keep up.
This “devastating duality” is having a profound impact on the financial well-being of families, making it harder for them to achieve financial stability and provide for their children. The chart referenced above provides a striking perspective on affordability for selected goods and services.
One of the principle stressors on the middle class is rising cost of medical care and prescription drugs. In addition, the aging population is putting a strain on the healthcare system, leading to a shortage of medical professionals and an increase in the cost of medical care. As a result, health insurance premiums are skyrocketing, making it harder for middle-class families to afford quality healthcare.
Healthcare costs have risen significantly over the past decade in the United States. According to data from the Centers for Medicare and Medicaid Services, total national healthcare expenditures in the United States increased from $2.6 trillion in 2010 to $3.5 trillion in 2019, representing a 35% increase over the course of the decade. Health spending in the U.S. increased by 9.7% in 2020 to $4.1 trillion or $12,530 per capita.
In addition to overall healthcare spending, the cost of health insurance premiums has also increased substantially over the past decade. According to a survey by the Kaiser Family Foundation, annual family premiums in for employer-sponsored health insurance average $22,463 for 2022, similar to last year ($22,221), On average, workers this year are contributing $6,106 toward the cost of family premium, with employers paying the rest. The modest change in premiums this year is unusual in that it is less than the increase in inflation (8%) or workers’ wages (6.7%) during the same period. Even with this year’s minimal change, average premiums for family coverage have risen 43% since 2012, more than the shift in inflation (25%) and a little more than wages (38%) over the same period.
These rising healthcare costs have had a significant impact on the finances of many individuals and families, particularly those in the middle class who may be struggling to keep up with the increasing cost of healthcare.
The rising cost of education is also having a significant impact on the middle class. Higher education costs have increased by more than 25% over the past decade, far outpacing the rate of inflation. This has led to an increase in student debt, which is now the second-highest form of debt in the United States, trailing only mortgage debt. As a result, many young adults are delaying important life milestones, such as buying a home or starting a family, because of the burden of student loan debt.
The combination of rising healthcare and education costs is putting significant pressure on the middle class. Many families are finding it harder to make ends meet, and some are even being forced to choose between paying for healthcare or education and putting food on the table. This is particularly true for families that are already struggling financially or those with a child who has a chronic medical condition.
The tradeoff is unconscionable—a choice between healthcare and education. Yet technology and innovation drive costs down in many categories including cars, clothing, TVs and software. Solutions are complex and are encumbered by the hegemony of educational institutions and the medical complex. But the financial curve is steep, and something is about to break…
John is the #1 global influencer in digital health and generally regarded as one of the top global strategic and creative thinkers in this important and expanding area. He is also one the most popular speakers around the globe presenting his vibrant and insightful perspective on the future of health innovation. His focus is on guiding companies, NGOs, and governments through the dynamics of exponential change in the health / tech marketplaces. He is also a member of the Google Health Advisory Board, pens HEALTH CRITICAL for Forbes--a top global blog on health & technology and THE DIGITAL SELF for Psychology Today—a leading blog focused on the digital transformation of humanity. He is also on the faculty of Exponential Medicine. John has an established reputation as a vocal advocate for strategic thinking and creativity. He has built his career on the “science of advertising,” a process where strategy and creativity work together for superior marketing. He has also been recognized for his ability to translate difficult medical and scientific concepts into material that can be more easily communicated to consumers, clinicians and scientists. Additionally, John has distinguished himself as a scientific thinker. Earlier in his career, John was a research associate at Harvard Medical School and has co-authored several papers with global thought-leaders in the field of cardiovascular physiology with a focus on acute myocardial infarction, ventricular arrhythmias and sudden cardiac death.
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