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You are definitely right about the ambiguity. I can't tell exactly what they meant by “financed out of household income”. Are they referring to people whipping out the credit card or dipping into personal savings, or are they including premiums and medicare/medicaid payments in the income definition? I took it to mean the former and you are making a good case for the latter, in which case it it does seem like a hard circle to square.

I should say however, if I remember correctly, the inequality calculation does not include tax transfers, which would definitely include Medicare and Medicaid which accounts for about %50 of all health care spending. I have no idea, though, if employer paid premiums are included. Either way your point is well taken.

However, in that the amount paid by the employer is now being considered as an employee's “income” which could be taxed (depending on what happens with health care reform) does this chart still hold? (Doesn't seem like it, in that the chart shows the consumer's out-of-pocket expenses, not total cost.)

The employer provided health care payments are being held as a reason why wages have remained stagnant over time – health premiums are taking a bigger chunk out of the cost per employee, so less gets funneled as salary, which is certainly a cost to the consumer.

http://www.piie.com/realtime/?p=595

I'd really like to see the source for this stat. Sounds removed from the reality I see people struggling with in my neck of the woods. Especially after Bush's push for “consumer driven health care” and employers' passing on more health care expenses to employees.

Or, if some, how much?