Consulting and actuarial firm Milliman reported Wednesday a typical family of four is paying $1,319 more this year for a preferred provider organization (PPO) plan — the highest dollar amount increase in the history of its Milliman Medical Index (MMI).
However, the 2011 MMI cost is $19,393, an increase of 7.3 percent over 2010, which is the lowest annual rate of increase in more than a decade.
Nevertheless, says Lorraine Mayne, Milliman principal and consulting actuary, "In 2002, American families had healthcare costs of $9,235, and those costs have now doubled in fewer than nine years. As costs continue to grow—and even as the cost trend decelerates—the total cost of care for American families constitutes a larger and larger portion of the household budget."
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Of the $1,319 total cost increase, employers bore $641 while employees shouldered the rest—$403 in payroll contributions and $275 in additional cost sharing.
"As has been the case in four of the last five years, employees are paying a larger share of the cost increase than their employers," said Scott Weltz, consulting actuary at Milliman. "That said, in absolute dollars, both employers and employees have shouldered approximately the same amount of additional costs since 2006, with employers absorbing $3,023 and employees absorbing $2,988."
In addition to looking at costs on a nationwide basis, the Milliman Medical Index also examines 14 geographic areas.
"This year, six of the fourteen cities we studied exceeded $20,000 in total costs for a typical family of four," said Milliman principal and consulting actuary Chris Girod. "But we still have several cities, Phoenix, Atlanta, and Seattle, with less than $19,000 in total costs for the typical family. These cost differences result from variation in local practice patterns and from differing costs for health care goods and services."
To view the complete Milliman Medical Index, go to www.milliman.com,
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