Milliman Medical Index Sees Highest Cost Increase Since 2006

May 18, 2009 ( - Milliman, Inc. announced that average total medical spending for its "typical American family of four" reached $16,771, an increase of $1,162.

While cost trends are decelerating for the third-straight year, the total-dollar increase is the highest since 2006 – 7.4%, Milliman said. The Milliman Medical Index (MMI) tracks the changes in average yearly health care costs when the family of four is covered by an employer-sponsored preferred provider organization (PPO).

This is the third consecutive double-digit percentage increase in the amount that employees spend for health care services.

Of the total medical cost for Milliman’s family of four, the employer pays about 59%, while the employee pays 24% in payroll deductions and 17% in out-of-pocket costs, according to the report. However, over the past year the total cost increase was borne more by employees than employers. Increases in employee costs exceeded the employer cost increase by 30% – a proportion that has never exceeded 10% in the history of the MMI, Milliman said.

Among the 14 metropolitan areas Milliman annually studies, health care costs varied by more than 30%, with the most-expensive city, Miami, becoming the first to pass the $20,000 per-family mark, and the least-expensive city, Phoenix, still below $15,000.

The MMI can be downloaded from here .