Health care spending for a family with a common employer-sponsored health plan has more than doubled over the past decade, according to research from the benefits consultant Milliman Inc.
A typical American family of four will spend an average of $9,695 on health care this year, according to actuarial projections in the 2014 Milliman Medical Index, which was released Wednesday. That counts their contribution toward insurance premiums, payments at the doctor’s office or pharmacy and even bottles of aspirin purchased at the drugstore. That compares with $4,443 spent in 2004 and is up 6 per cent from last year.
Milliman actuaries make their projections for a family with preferred provider organization, or PPO, coverage through a big employer. That’s a common form of insurance that involves large networks of doctors and other care providers.
That annual cost increase may not be readily apparent to most families. It’s spread out over the year, and the biggest part is the premium, or cost of coverage. That usually comes out of an employee’s paycheque before taxes.
The actual cost that an individual family racks up will vary heavily depending on things like how much care they use, the coverage they have, the age of the family members and how much their employer contributes to the premium.
The total cost of health care for the family, counting the employer’s premium contribution, will reach $23,215 this year, Milliman projected. That represents an increase of only 5.4 per cent from 2013, which is the slowest year-over-year growth in the 14-year history of the medical index.
That rate is still well above the broader rate of inflation.
Employers typically pay most of the premium for an employer-sponsored health plan. But Milliman’s annual report found that employees and their families are paying a bigger share of the overall bill, as they have been for the past few years.
Companies that offer coverage to their workers have been raising co-payments made at the doctor’s office and other out-of-pocket costs for workers. That lowers the premium, or coverage cost, and it exposes employees more to the cost of care. Some benefits experts feel that the best way to control health care cost growth is to make employees more aware of the expense.
Milliman actuaries also found that the health care overhaul, which aims to cover millions of uninsured people, had little impact on the cost projection for their typical family, and they don’t know yet whether that will change. The law focuses mostly on the individual health insurance market and coverage for small-business employers.