Family Medical Costs Continue Increase

May 12, 2010 ( – The total 2010 medical costs for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) is $18,074, according to the Milliman Medical Index.

This is a 7.8%-increase from the 2009 amount of $16,771.  Milliman noted in its report that while this is the third year in a row where the annual rate of increase is below 8%, the dollar amount of the increase is the highest it has seen in the last 10 years and since inception of its index.  

According to the report, both employers and employees shared the cost increase, with employers’ total costs increasing 8% and employees’ total costs increasing 7.4%. At $10,744, the average employer share of cost has surpassed $10,000 for the first time.  

Physician services make up a third of the total cost for the Milliman family of four, while inpatient facility care accounts for 31% of the cost. The largest dollar increase this year was for inpatient facility care, which increased $498 annually.  

Outpatient facility care represents 17% of the total cost, and pharmacy costs are 15% of the total.  

Milliman noted that provisions of the health care reform legislation could affect the annual rate of increase for its typical family of four in the years to come. For one thing, Milliman said required benefit changes under health care reform will tend to shift costs from employees to employers.   

The Milliman Medical Index report is here.