Let me walk you through a simple calculation that might change how you think about your compensation.
Calculate Your Healthcare Tax
Use the Healthcare Cost Calculator →
Or do it manually:
Step 1: Pull up your most recent pay stub and your benefits enrollment documents.
Step 2: Find these numbers:
- Monthly premiums deducted from your paycheck
- Your employer’s contribution to your premiums (usually on your benefits statement)
- Your annual deductible divided by 12
Add those three together. That’s your monthly healthcare cost.
Step 3: Take your gross salary and add your employer’s full premium contribution. That’s what you’re actually “paid” before healthcare comes out.
Step 4: Divide your annual healthcare costs by your total compensation. Multiply by 100.
That percentage? That’s how much of your earnings disappears before you’ve received a single medical service.
What That Number Really Means
For most Americans, this calculation reveals something uncomfortable: between 15-25% of total compensation evaporates into insurance premiums and deductibles. Before the first doctor visit. Before the first prescription. Before anything.
And that’s before we talk about copays, coinsurance, out-of-network surprise bills, or the collection agencies that come calling when the math doesn’t work out in your favor.
You might argue that the “negotiated rates” count as value—that $200 office visit that your insurer “negotiated” down to $85. But let’s be honest: those inflated prices exist primarily to make the discount look impressive. It’s a shell game where the list price is fiction and the “savings” are theater.
A Different Perspective
Consider how other developed nations handle this math:
In Canada, the effective healthcare tax rate ranges from 7-13% of income, depending on province and income level. In the UK, National Insurance contributions dedicated to the NHS run about 8-10% for most workers. France’s healthcare-specific contributions average around 8% of gross salary.
What do you get for those percentages?
- No deductibles
- No premium contributions
- No claims denials
- No out-of-network surprises
- No medical bankruptcies
- No debt collectors calling about that ER visit
Just… healthcare. When you need it.
The Real Question
We’re already paying the tax. We’re just routing it through a system that requires prior authorization forms, claims adjusters, billing departments, collection agencies, and profits for shareholders.
The percentage you calculated above? That’s not the cost of healthcare. That’s the cost of our current healthcare payment system, plus whatever medical care you might actually receive—assuming your claims get approved and you can afford what’s left after insurance “pays their part.”
So maybe the question isn’t whether we can afford a different approach.
Maybe it’s whether we can afford to keep pretending the current system isn’t already extracting the same—or higher—cost, just with worse outcomes, more paperwork, and the constant anxiety of potential financial ruin from getting sick.
Calculate your healthcare tax now →
See what percentage of your compensation is already spoken for. Then ask yourself: what exactly are we getting for that investment?