The national conversation over high drug prices just had a little more gas thrown on that fire.
The annual Milliman Medical Index, a recognized benchmark on the direction of health care spending, said the average annual health care costs incurred by a typical family in the U.S. rose 4.7 percent this year to $25,826. Milliman, the global actuarial firm that produces the MMI, said the hike is the lowest annual increase
since the firm began compiling the MMI in 2001.
The MMI is a measure of how much a family of four covered by an employer-sponsored PPO health plan spends on health care services in a year. It includes premiums paid by the employer and employee and the out-of-pocket health care expenses incurred by the family.
Despite the moderate increase, it’s the first time that the MMI has crossed the $25,000 annual threshold, the firm reported.
Also, the employee’s share continues to grow. This year, the employee’s piece of the $25,826 rose 5.3 percent to $11,033. The employer’s share, by comparison, rose 4.2 percent to $14,793. The employer’s share still represented 57 percent of the overall cost, but that’s down from 61 percent in 2001, the firm said.
Of particular interest to policymakers and presidential candidates is the role that prescription drug prices are playing in driving health care costs higher. Milliman said prescription drug costs are the fastest growing component of the MMI and, at $4,270 per year, represent nearly 17 percent of annual health care costs. Prescription drug costs rose 9.1 percent this year. That’s down from 13.6 percent last year but still nearly double the overall increase in the MMI.
Specialty drugs, like certain oncology medications, represent 35 percent of the prescription-drug total now compared with “a small sliver” back in 2001, the firm said.
“Although increases in total drug costs may spike or moderate in the short-term as new drugs are introduced or as patents expire, long-term expectations are that these very expensive drugs will continue to be a growing proportion of total health care costs,” the report warned.