Annual Health Plan Cost for ‘Typical’ Family Hits $22,030

Health care costs for a family of four up 6.3% in 2013

By Stephen Miller, CEBS May 27, 2013

In 2013 the cost of health care for a typical American family of four receiving coverage through an employer-sponsored preferred provider organization (PPO) plan is $22,030, according to the2013 Milliman Medical Index(MMI).

“For the second consecutive year, the increase over the prior year on a percentage basis was the lowest in the history of the study—and yet, the total dollar increase still exceeded $1,300 for the fourth year in a row,” said Lorraine Mayne, principal and consulting actuary at benefits consultancy Milliman.

“The cost for our typical family is split between employer and employee, with the employer paying about $12,886 in employer subsidy, while the employee pays the remaining $9,144 in the form of payroll deductions and out-of-pocket costs,” added Scott Weltz, principal and consulting actuary at Milliman. “While both employers and employees share the burden of financing annual cost increases, our study shows that this year employees continue to take on a growing share of the overall costs.”

Since being passed, the Patient Protection and Affordable Care Act has dominated many discussions on health care costs; however, the law has not materially affected the cost of care for families covered by large employer-sponsored plans that the MMI tracks. Milliman’s analysts expect that the implementation of increased coverage mandates under the PPACA in 2014 will have little impact on the cost of care for the “typical” family insured through a large group health plan.

Among other findings reported in the 2013 MMI:

  • This year’s 6.3 percent increase over 2012 marks the fourth consecutive year of decreasing cost trends.
  • On average, an employee pays $5,544 in payroll deductions and $3,600 in out-of-pocket costs. This represents a cost increase of 6.5 percent compared with last year’s total employee cost of $8,584.
  • It is difficult to pinpoint a single cause for the slowing rates of increase, as several factors may be influencing cost trends. Possible explanations include the slow economic recovery, increased provider integration and a shortage of new “blockbuster” drugs coming to market.

Stephen Miller, CEBS, is an online editor/manager for SHRM.​


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