How will you pay your lifetime $4 million healthcare bill?

Your $4 Million Bill and The Anatomy of Health InsuranceThe following infographic shows that a typical 22 year old worker and his employer can expect to pay over $4,000,000 in his lifetime for healthcare and health insurance. That number seemed awfully high, so I created a spreadsheet model to see if I could match it. I did, and here are my assumptions.

  • Starting salary at age 22 = $53,000 ($870,000/year by age 70)
  • Annual salary increase = 6% compounded
  • Percent of income for healthcare = 18%, increasing by 0.3% per year

I assumed a modest salary that increased at 6% compounded each year, but that’s a simplistic view since raises are larger earlier in a career and generally taper off (or even go negative) as you get older. I calculated to age 70 to account for longer lifespans and the likelihood that young people will continue working that long by then.

US per capita healthcare spending is already $7,960 – the highest in the world. That’s where the 18% of salary came from, but I increased it by 0.3% each year to age 70. Again, a more detailed model might factor in the fact that costs increase with age, rather than the straight-line extrapolation I did. While different assumptions lead to different outcomes, and each case will be different, the overall message is the same. Healthcare costs are already expensive and increasing beyond what most people expect.


Technology offers one Solution

We must address these rising costs as longevity increases and our aging population booms. One way is to promote health & wellness over treatment, and another is through the smart use of technology so we can move at least 50% of healthcare services from institutions to homes. But as new tech solutions and care options evolve, how will individuals learn about them and know which best fit their needs? That’s where Modern Health Talk comes in – by providing information and ways to plug into communities of individuals who share their discoveries and experiences with others. (See Resources tab at the top of the page.)