Americans’ third biggest living expense is health insurance

Health Insurance - money - piggy bank

Premiums have risen to the point that they require 10.69 percent of an average annual salary.

Health insurance premiums comprise a large amount of the average annual income of Americans and consumers are being forced to weigh their priority with other essential expenses, say the results of a new NiceRx study.

The premiums paid represent about one dollar out of every ten the average American earns.

To arrive at its results, the researchers from NiceRx used data from the Bureau of Economic Analysis, Value Penguin, World Population Review, and Patriot Software. This made it possible for the researchers to layer the costs customers face over their health insurance premiums.

Health Insurance - Money - calculations

“As health insurance is so important for safeguarding your wellbeing, as well as being such a large monthly expense for many people, we wanted to find out just how affordable it really is,” said the researchers’ report. “We’ve pulled together data from a range of sources to see which states pay the most for their health insurance, and what proportion of their salary these policies eat up. We’ll also take a look at some of the large cost of living expenses to see how expensive health insurance is in comparison.”

The researchers found that health insurance was the third most expensive cost of living for Americans.

The researchers determined that the average US income was $60,657.90. Of the cost of living expenses, rent absorbed the largest share of that total, at $17,129.28, which is 28.24 percent of their annual income. The second highest cost of living expense was childcare, which cost $11,165.20 per year, 18.41 percent of their annual income.

In third place was health insurance, which cost an average of $6,487.20 per year, which was 10.69 percent of the total income of the average American.

In fact, in four states, those premiums represented a much higher 15 to 21 percent of the average American’s annual paycheck, said the study. Those states were West Virginia, Louisiana, Vermont and Hawaii.

The researchers also underscored that the premiums paid don’t necessarily represent the full cost of healthcare paid by many Americans, who still face deductibles and other out-of-pocket costs.

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