Reasonable Costs: What Can Ohioans Afford to Pay for Health Care?

April 29, 2008

Wages in Ohio make health care unaffordable for many Ohioans. Approximately 20 percent of all Ohioans live in families earning less than needed to meet their basic family budget. A basic family budget for Ohioans includes costs for housing, utilities, food, health care, child care, transportation, clothing, school supplies, and taxes. When families do not earn enough to meet all of these basic needs, they spend more than they can afford on health care or go without health care coverage altogether. While some Ohioans manage to pay for health care or health insurance, often they cannot afford to do so, and over one million Ohioans, 11 percent of Ohioans under the age of 65, lack health insurance altogether. Policymakers should use a progressive sliding scale when considering what families at different income levels can afford to spend on health care. People with lower incomes can afford to spend not only less in absolute dollars, but also less as a percentage of their income — they have less disposable income, with more of their basic family budgets devoted to other core necessities such as housing, food, and transportation. People with low incomes can pay only nominal amounts toward health care. Limiting total health spending to 4 percent of household income, for households earning between 300 and 500 percent of the federal poverty line, would enable most of these Ohioans to “take up” coverage and enroll. The upper limit that anyone should be expected to pay is approximately 8.5 percent of income.e should be expected to pay is approximately 8.5 percent of income.

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