This report, jointly authored by the California Budget Project and the UCLA Center for Health Policy Research, finds that many California families spend a substantial amount on health care premiums and out-of-pockets costs, and could face financially devastating medical expenses if they are not adequately protected. The report recommends that health care reform proposals ensure that families can realistically afford premiums and out-of-pocket costs, such as copayments and deductibles. This report provides insight into how much Californians can afford to pay for health care by estimating how much they currently pay for health care including both insurance premiums and out-of-pocket expenses and how much they pay for the cost of other basic necessities, including housing, child care, transportation, food, and taxes on the income needed to purchase these necessities. This analysis uses data from the federal Medical Expenditure Panel Survey to examine health expenditures for different types of families. For each family type, the report estimates the typical, or median, expenditure level, as well as the amount spent by families with much higher health costs. It also uses the California Budget Project's (CBP) Basic Family Budget to estimate families' other costs. California Health Interview Survey data are also used.