Annual Health Care Cost for American Family of Four....

Source: PRNewswire

PRESS RELEASE

Publication date: 2005-05-25





SEATTLE, May 25 /PRNewswire/ -- Milliman, Inc., one of the premier global consulting and actuarial firms, announced today that average medical spending for the "typical American family of four" reached $12,214 in 2005. The finding is contained in the first annual Milliman Medical Index (MMI). The MMI measures average yearly healthcare costs when the family of four is covered by an employer-sponsored Preferred Provider Organization (PPO). The new Milliman study determined that the average annual medical cost for a family of four increased by 9.1% from 2004 to 2005. The average annual rate of increase for the four year period 2001-2005 was 9.8%.

"The Milliman Medical Index provides a benchmark by annually assessing the changes in those costs over the past 5 years," said study co-author William Thompson, a Milliman principal and consulting actuary. "Unlike most surveys that focus exclusively on 'employer' cost increases, the MMI analyzes what it really costs the U.S. economy to deliver health care, and how this burden is allocated between employers and employees," Thompson added.



"The MMI examines the key drivers and the components of actual medical spending, including physician charges, prescription drugs and hospital charges," said Robert Cosway, Milliman principal and consulting actuary. "We break out and measure the rate of consumer spending versus the rate of total spending for health care in a given year. Based on a typical PPO plan design, Milliman estimates that the typical American family of four would pay $2,035 out of their own pocket through member cost sharing in 2005," study co-author Cosway added.



Medical costs for a family are determined by the number, type and cost of healthcare services that they utilize and the amounts that the employee's health plan pays medical providers for these services. Utilization of medical services for a particular family varies significantly based on the family's ages, geographic area, health status and other factors. The MMI is based on Milliman's analysis of historical claim data and understanding of trends in provider contracting. The complete Milliman Medical Index is available at http://www.milliman.com/ , or by calling Jim Loughman, Director of Media Relations and Public Affairs, at 203-698-0008.