Typical American family faces $26,944 in annual healthcare costsStaff Writer | May 17, 2017
Milliman released the 2017 Milliman Medical Index (MMI), which measures the cost of healthcare for a typical American family of four receiving coverage from an employer-sponsored preferred provider plan (PPO).
America An employer-sponsored preferred provider plan
"The good news is that we are seeing a record-low 4.3% cost increase in this year's MMI," said Chris Girod, co-author of the Milliman Medical Index.
"The bad news: Continuing a 12-year pattern, healthcare costs for a typical family of four this year increased by more than $1,100."
In recent years, the Milliman Medical Index has reported notable increases in pharmaceutical costs. Last year, drug costs increased by 9.1%. That rate of increase fell to 8% in 2017, which is still more than twice the rate of increase for all other components of healthcare spending.
"We're seeing a smaller rate of increase for prescription drugs this year," said Scott Weltz, co-author of the MMI.
"But the longer view reveals a different story. Since we began tracking this data in 2001, prescription drug costs for the typical American family have increased from $1,111 to $4,612."
This year's MMI includes analysis of dynamics driving healthcare costs, including the sometimes elusive nature of rebates in drug pricing. While rebates often do not result in cost savings for consumers at the pharmacy, they still impact the larger cost puzzle.
The MMI is unique among health cost studies because it measures the total cost of healthcare services used by the family of four, including out-of-pocket expenses paid at time of service.
The MMI also separates costs into portions paid by employer versus employee. This year, the employer pays $15,259 of a family's total healthcare costs and the employee—through payroll deductions and cost sharing at the time of service—pays $11,685.
"Back in 2001, the first year we measured the MMI, employees paid 39% of healthcare costs," said Sue Hart, co-author of the MMI.
"This year, the family's share of healthcare costs reached 43% of the total—a $11,685 total. We've seen a long, slow shift toward employees as these plans look to control healthcare costs." ■