Question

Which of the following statements about medical care costs is true? In the last decade, medical care costs have risen more slowly than the overall rate of inflation. Medical care costs per person have risen faster than income per person. Since many medical expenses are paid for by a third party, the third-party payers have been able to force large reductions in medical expenses, compared to an out-of-pocket system. In the United States, workers are taxed on company-funded medical care expenses, while in Europe workers are not taxed on those expenses.

Answer 1

2. Medical care costs per person have risen faster than income per person. It is true because health care cost $27.2 billion in 1960, just 5 percent of GDP. That translates to an annual health care cost of $9,990 per person in 2015 versus just $146 per person in 1960. Health care costs have risen faster than the annual income.