Managed Care


Medical Costs Rise For Family of Four

MANAGED CARE June 2008. © MediMedia USA
News and Commentary

Medical Costs Rise For Family of Four

MANAGED CARE June 2008. ©MediMedia USA

Your typical American family of four is going to have $15,609 in medical expenses this year. That’s an increase of more than $1,100 from last year.

That number is reported in the fourth annual Milliman Medical Index (MMI), which tracks the average yearly health care costs when the family of four is covered by an employer-sponsored preferred provider organization (PPO).

The new study determined that the average annual cost for a family of four increased by 7.6 percent from 2007 to 2008.

This was lower than the 8.4 percent average annual rate of increase for the period 2003–2007.

The report emphasizes, however, that the burden of overall expense is steadily shifting to employees.

“The MMI examines the key drivers and the components of actual medical spending, including physician charges, prescription drugs, and hospital charges,” says Gary Brace, a principal and study coauthor. “Over the past year . . . prescription drug costs increased by double digits at 10.6 percent. This is a trend we expect to continue for several years, as fewer high-volume drug patents expire.”

Medical costs are determined by the number, type, and cost of health care services that are utilized and the amounts that the employee’s health plan pays medical providers for these services.


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