Tuesday, September 9, 2014
Do Health Care Costs Fuel Economic Inequality in the United States?
The growing debate over economic inequality in the developed world raises an interesting question that is particularly pertinent to the United States. Have escalating health care costs contributed to the huge economic gap between America’s rich and the rest? The evidence, it turns out, is suggestive, but not definitive.
From the perspective of the more than 150 million Americans who receive health insurance through their employers, health care costs may, in fact, be widening inequality. Economists generally agree that employers for the most part treat workers’ compensation in all forms—wages and benefits—as a single expense. When health insurance premiums go up, employers may reduce take-home pay to keep overall compensation in check....