Health care costs more than year of groceries for american families


Health care costs more than year of groceries for american families

The average family in the U.S. with health insurance coverage through their employer now spends more on yearly medical care than on a year of groceries, according to a new study.

The report, the 2013 Milliman Medical Index, published by Milliman Inc., looked at the costs of health care for a family of four living in the U.S. The experts found that the yearly cost of benefits through an employer-sponsored preferred organization increased 6.2% to $22,030, compared to $20,728 last year.

Chris Girod, principal and consulting actuary at Milliman Inc., reported to Forbes, "It is a huge expense. Although the trends are slowing down, the total dollar amount has risen $1,300 per year each of the last four years."

At the same time, as employers push more costs onto their employees, the share a family and workers pay keeps increasing.

As a result, the total percentage of the overall costs keeps adding up, and ends up exceeding the cost of other important needs such as food and the yearly cost of gas.

The researchers said:

"The total share of this cost borne directly by the family - $9,144 in payroll deductions and out-of-pocket costs - now exceeds the cost of groceries for the (Milliman Medical Index's) typical family of four. The out-of-pocket cost alone - $3,600 for co-pays, coinsurance and other cost sharing, is more than the average U.S. household spends on gas in a year."

"Whether our family fully realizes the degree to which total healthcare costs eclipse so many other household costs is another question," the experts added.

In four of the last five years, the family of four has experienced a greater percentage rise in health care costs than the employer.

"Our typical family is well aware of the increasing cost of care, even if it is only responsible for paying 41 cents of every healthcare dollar," the authors pointed out.

The Affordable Care Act, signed by President Obama, has not yet affected the cost of care for families covered by the large employer-sponsored plans talked about in the study.

The report did, however, highlight particular aspects the heath law is urging, including the movement to Accountable Care Organizations (ACOs) that might have the potential to "bend the cost curve".

The majority of private health insurance companies are linking with ACO's to care for more people through their employers. These insurance companies include those operated by:

  • Cigna (CI)
  • Aetna (AET)
  • Humana (HUM)
  • Blue Cross
  • UnitedHealth Group (UNH)
According to Girod, ACOs are being looked at by health care experts as having considerable potential to slow health inflation.

Girod said:

"Do they have the potential to bend the cost curve? Most people say, 'yes,' but the jury is still out. We have a lot of hope that those things can bend the cost curve."

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Section Issues On Medicine: Cardiology