Milliman releases its fourth annual study of average medical spending

Milliman, one of the major actuarial firms in the United States, released its fourth annual study of average medical spending for a typical American family of four (Source: "2008 Milliman Medical Index," Milliman, May 2008).  This report both tracks national trends and health cost data for 14 major metropolitan areas.

Key findings include:

• The total medical cost in 2008 for a typical American family of four is $15,609 (compared with $14,500 in 2007).
• The average annual medical cost of the family increased by 7.6% from 2007 to 2008. While the $1,109 increase is a big expense, the rate of increase was down for the second straight year and is the lowest rate of increase in the past five years.
• There is a wide variation in costs across the country. Among the 14 metropolitan areas studied, healthcare costs varied by more than 35% from lowest to highest.
• While the overall rate of cost increase was down this year, the rate of prescription-drug cost increase was up for the first time since 2006.
• For the employee's share of spending on healthcare services, 2008 marks the second consecutive year of double-digit increase. 

According to this analysis, the employer pays for about 60 percent of total medical cost while the family pays for 40 percent of the cost.  Just over half of the employee share goes for payroll deductions to purchase health insurance.  This contribution increased by 10.1 percent in 2008.  The remaining employee share goes for cost sharing on health services.