Tom Daschle: Climbing the Hill on Health Care - WSJ.com:
"Failure to address ever-escalating health costs means that a typical family will see its annual cost of health insurance rise to $25,000 by 2025 from about $12,000 now."
While this is clearly a politician's appeal, I am going to stay away from the reasoning behind using a figure 16 years in the future without discounting it back to present value.
The Rule of 72 is a back of the envelope way of figuring out how long it will take something to double. Divide 72 by the expected growth rate to get the number of years to double. If the growth rate is 7.2%, then the amount doubles in 10 years.
The former Senator has given us the final value and the number of years. We need to figure out what the current cost of of health insurance for a "typical family" is. If one assumes that cost to be $12,500, then we know it will double over 16 years. That gives an approximate health insurance growth rate of 4.5%.
The National Coalition on Healthcare says, "The average employer-sponsored premium for a family of four costs close to $13,000 a year...". To explain further gets me into political commentary I rather not explore in this forum.
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