By Chris Girod, FSA, MAAA, Sue Hart, FSA, MAAA, Dave Liner, FSA, CERA, MAAA Tom Snook, FSA, MAAA, Scott Weltz, FSA, MAAA
Milliman Research Report, July 2019
In 2019, the cost of healthcare for a hypothetical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $28,386, according to the Milliman Medical Index (MMI).
2019 MMI Components of Spending
30% $1,888 Physician
29% $1,864 Outpatient
19% $1,195 Inpatient
20% $1,282 Pharmacy
2% $137 Other
2019/2018 Annual Increase in Spending
3.6% Employer subsidy
4.1% Employee contribution
3.8% Employee out-of-pocket
4.0% Employee total
3.8% Total for employer + employee
Comment:
By Don McCanne, M.D.
For 2019, the cost of health care for a typical family of four covered by an employer sponsored PPO is $28,386. Although that is split between employer and employee contributions, it actually represents the employee’s costs since the employer contribution is paid by forgone employee wage increases. That is an increase of 3.8% over last year, higher than the current 1.6% rate of inflation.
Keep in mind that this represents the relatively healthy workforce and their young, healthy families.
The median family income in 2016 was $59,039. Although this is not the same as the family represented by the MMI, it does provide a perspective that high health care costs remain a major problem, calling for effective health care financing reform. Single payer, anyone?
Clarification:
By Don McCanne, M.D.
Although the cost of health care for a typical family of four is $28,386, the cost for an average individual is $6,348. The table of the breakdown in the 2019 MMI components of spending is for an average individual, not a family.
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