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Average Family of Four Will Pay $13,382 for Health Care, Study Estimates

By CQ Staff

June 29, 2006 -- The "typical American family of four" will pay an average of $13,382 for medical services in 2006, up 9.6 percent from 2005, according to a study by the consulting firm Milliman.

The study, part of the second annual Milliman Medical Index, examined average costs in five areas for a family covered by an employer-sponsored PPO. The five areas include inpatient services, outpatient services, physician care, pharmacy costs, and other services, such as ambulatory care, medical equipment, private nursing, and home health costs.

The study found that, over the last five years, increases in medical costs in each category varied each year. Outpatient care, for example, experienced a 12.6 percent increase over 2005 rates, yet trended downward in the previous years. Physician care remains the largest area of medical costs at $4,793, or 36 percent of total costs, according to the study. When combined with outpatient care, however, inpatient care costs make up 46 percent.

Cost sharing, or the amount patients pay at the point of service, also has increased along with medical costs, the study says. Of the $13,382 annual cost in medical services, a typical family will pay $2,210 in out-of-pocket costs. But increases in consumer cost-sharing have not matched increases in medical costs, the report notes. Out of the total costs, employers will pay $8,362, or 62 percent, while employees will pay $5,020, or 38 percent—$2,810 in payroll deductions and $2,210 in cost-sharing.

The study notes, however, that costs are dependent on many factors, such as age, geographic location, and health, as well as which services different health plans cover.

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