Health care costs the average family a lot. According to Milliman, the amount is $20,728 in 2012 for a family covered by a typical PPO plan. (Milliman Report) This is a 6.9% increase over 2011, slightly less than previous years’ increases, although in total since 2008 the cost has risen from $15,600, or about 30%. The actual out-of-pocket costs are about $3,470 and premium contributions are $5,114 and those are what the family is most aware of. But economists consider the remainder, the employer’s contribution, to also come from the family in the form of foregone wages. There is fairly significant geographical variation, with Miami topping the list of major metropolitan areas at $24,965 and Phoenix being the most affordable at $18,365, almost a 30% difference.
Among cost categories, hospital outpatient continues to show the fastest growth, at 8.6%, although slightly down from prior years. Hospital inpatient grew 7.6%, physician costs a relatively slow 5% and drugs 7.3%. Almost all the inpatient cost increase is due to unit price growth. One thing to note is that the actuarial value of the average plan is above what the reform law defines as a gold plan, so employers still have room to increase the employee cost share. Some of the reform law provisions have already become effective, raising costs for employers, but they generally have found ways to shift those costs to employees in other ways and Milliman anticipates that this will continue to be the case if the law stays in effect.