2020 Milliman Medical Index
In 2020, the cost of healthcare for a hypothetical American family of four covered by an average employer-sponsored preferred provider organization plan is $28,653, according to the Milliman Medical Index.
The annual Milliman Medical Index (MMI) measures the total cost of healthcare for a typical family of four covered by a preferred provider organization (PPO) plan. The 2012 MMI cost is $20,728, an increase of $1,335, or 6.9% over 2011. The rate of increase is not as high as in the past, but the total dollar increase was still a record. This is the first year the average cost of healthcare for the typical American family of four has surpassed $20,000.
Our family of four is insured by an employer-sponsored PPO plan, which includes certain out-of-pocket costs such as copays and deductibles. The plan’s premiums are paid jointly by the employer and by the employee via payroll deductions. Healthcare benefits are a substantial portion of the employee’s compensation.
Our family of four may be surprised to learn that their annual healthcare costs are nearing $21,000, because their own out-of-pocket costs, at an average of $3,470, are the portion of the cost of care most visible to them. Some employees may also be acutely aware of the $5,114 in payroll deductions. This brings the employee’s total share to $8,584.
While the annual rate of increase fell below 7% for the first time in the 12 years tracked by the MMI, the total dollar amount of the increase overshadows any relief that consumers might derive from the slowing percentage increase.
As of the release date of this report, the nation is awaiting a U.S. Supreme Court decision on the future of the Patient Protection and Affordable Care Act (PPACA). To date, PPACA has had only a limited effect on total healthcare costs for the MMI’s illustrative family of four. With the MMI release in between the Supreme Court deliberations and its decision, we are left with more uncertainty about the future of healthcare costs than usual. As we examine the different components of the MMI, we offer considerations for the future both with and without reform.