Unbiased Analysis of Today's Healthcare Issues

Affordability Index

Written By: Jason Shafrin - Jan• 15•09

Everyone knows that health insurance is getting more and more expensive.  But how can we measure how expensive it is?  A paper by UC-San Diego professors Richard Kronick and Todd Gilmer creates an “affordability index” to measure this.  The affordability index is equal to the per-capita, non-elderly health spending divided by the median income.  In essence, it measures what percentage of our income is being dedicated to health expenses.

The affordability index worsened from 5.6 percent in 1989 to 10.9 percent to 2002.  This lack of affordability has accompanied the contemporaneous rise in the percentage of uninsured individuals.

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