The cost of medical care is nearly $25,000 annually for the typical American family with health insurance coverage through their employer, according to a new study.
The 2015 Milliman Medical Index, which is published by consulting firm Milliman Inc., measures health costs of a typical family of four for a year. Unlike other health cost studies that tend to look at premiums paid by employers as well as employees and worker dependents, the Milliman index examines total cost of health services used by a family, including “out of pocket expenses used at the time of service.”
Annual cost of benefits through an employer-sponsored preferred provider organization (PPO) rose 6.3%, or $1,456, to $24,671 in 2015 compared to $23,215 in 2014. Almost a third of this year’s cost increase, or $467, came from prescription drugs, Milliman’s medical index showed.
“The rate at which prescription drug costs increased this year doubled over the average increase of the prior five years,” Scott Weltz, co-author of the Milliman report said in an accompanying statement.
The 2015 Milliman Medical Index shows health costs jumped to nearly $25,000 for a family of four... [+]
Pharmaceutical costs that had been rising at a growth rate of between 6% and 7% the previous five years jumped 13.6% from last year to this year. The Milliman Medical Index is the latest in a parade of new health care cost studies to show prescription drugs on the rise.
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The Milliman index showed prescription drug costs account for about 16% of total health care spending for a family of four. (See chart that is included). Inpatient hospital care (31%), professional services (31%) and outpatient care (19%) remain larger components of health care costs.
Though overall costs continue to outpace the consumer price index, there are glimmers of hope for health inflation to slow as trends in payment to doctors and hospitals by private insurance companies and the government via Medicare, Medicaid and under the Affordable Care Act move away from fee-for-service medicine.
As one example, Milliman cited outpatient facility expenses that have moderated significantly in the past two years to between 7% and 8% from nearly 10% the previous five years.
Insurance contracts with providers “often use fixed payments per day or per case,” the report said. The report also said physician cost increases were at “historic lows,” rising just 3.6%.
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Components of total health care costs, including co-payments, deductibles and cost-sharing at time... [+]
