Milliman Indicates 2009 Medical Cost for 'American family of four' Exceeds $16,700 Based on 7.4% Cos...( Current economic conditions and the u...),Health

Current economic conditions and the unknown effect of healthcare reform create unprecedented cost uncertainty

SEATTLE, May 18 /PRNewswire/ -- Milliman, Inc., one of the premier global consulting and actuarial firms, announced today 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.

The Milliman Medical Index (MMI) tracks the changes in average yearly healthcare costs when the family of four is covered by an employer-sponsored preferred provider organization (PPO). The new Milliman study provides not only a total cost number for this family but also the share of costs between employers and employees. It also offers cost differences among 14 metropolitan areas.

"Among lost jobs, lost revenue, strained government budgets, consumer insecurity, and an uncertain future, the macroeconomic climate is affecting healthcare costs," said study co-author Lorraine Mayne, Milliman principal and consulting actuary. "Throw in healthcare reform and you have a cost trend environment unlike any we've seen in recent memory."

"The macroeconomic cost pressures are being borne both by employees and employers," said MMI co-author Ron Cornwell, Milliman principal and consulting actuary. "Employers still pay the majority -- 59% this year. Employer subsidies have increased about $500 while employees have seen increases of about $650, including $500 for employee contributions and $150 for employee out-of-pocket costs."

Medical costs for a family are determined by the number, type, and cost of healthcare services that they utilize and the amounts that the employee's health plan pays medical providers for these services. Utilization of medical services for a particular family varies significantly based on the family's ages, geographic area,
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