US medical cost for 'family of four' estimated at $13,382 for 2006

The average total medical spending for the "typical American family of four" reached $13,382 in 2006. The finding is contained in the second annual Milliman Medical Index, which measures average yearly healthcare costs when the family of four is covered by an employer-sponsored Preferred Provider Organization. The new study by Milliman, a US consulting and actuarial firm, determined that the average annual medical cost for a family of four increased by 9.6% from 2005 to 2006. The average annual rate of increase for the four-year period 2002-2006 was 9.7%.

"The Milliman Medical Index provides a benchmark by annually assessing the changes in those costs over the past 5 years," said study co-author Robert Cosway, a Milliman principal and consulting actuary. "Unlike most surveys that focus exclusively on 'employer' cost increases, the MMI analyzes what it really costs the US economy to deliver health care, and how this burden is allocated between employers and employees," he added.

"The MMI examines the key drivers and the components of actual medical spending, including physician charges, prescription drugs and hospital charges," said Jack Burke, Milliman's principal and consulting actuary. "We break out and measure the rate of consumer spending versus the rate of total spending for health care in a given year. Based on a typical PPO plan design, Milliman estimates that the typical American family of four would pay $2,210 out of their own pocket through member cost sharing in 2006," he added.