The average healthcare costs of a family of 4 will hit $13,382 in 2006, a 9.6% increase over 2005 that matches the annualized increases since 2001. These findings are from the Milliman Medical Index report released today. The report estimates that a typical family of four will be responsible for about 38% of total annual medical costs, including $2,210 in out-of-pocket spending and $2,810 in payroll deductions. These costs are generally not tied to rank or pay in the employer.
Physician costs, held down by federal price controls, have risen by 5.6%, significantly less than other services. Physician costs are the largest single component of total costs at 36%, followed by inpatient care at 30%, outpatient at 16% and pharmacy at 14%
The so-called “consumer-driven health plans” have grown to 5 million people, which while a fast takeoff, will probably hit cruising speed very soon and decline. This represents less then 3% of the 177 million Americans covered by employer health plans. The Milliman report discusses some of the barriers to consumers, including the absence of “sufficiently actionable information”, such as pricing and quality. More importantly, healthcare costs are highly unpredictable, and can consume a lot of real dollars – which makes them a bad deal for the vast majority of Americans.