Health care costs for a family of four covered by workplace health insurance will exceed $20,000 for the first time ever this year -- $20,728 to be precise -- according to a new study released Tuesday. That's $1,335 more than in 2011.
A family of four will pay $5,114 in premiums for a preferred provider organization plan, a common type of health insurance, along with $3,470 in out-of-pocket costs like co-payments for doctor visits and prescription drugs, according to the report issued by Milliman, a firm that consults with companies on employee benefits. The remainder of the expenses will be paid by employers, though money spent on health care and other fringe benefits is money not spent on higher wages.
Relentless increases in health care costs, which the federal government says rose to $2.6 trillion in 2011, are squeezing employers, workers, families and government budgets every year.
Almost 50 million Americans had no health insurance as of the 2010 census, more people are going without medical care they need because of cost, employees are being asked to shoulder a greater share of the burden for health care costs while seeing their benefits scaled back, and more companies are dropping coverage for workers. Meanwhile, the United States falls behind other industrialized nations on measures of health care quality, in spite of all this spending.
Family health care costs grew by 6.9 percent between 2011 and 2012, slower than in previous years, but Milliman suggests there's little comfort in that.
"The rate of increase is not as high as in the past but total dollar increase was still a record," the report says. "The dollar amount of the increase overshadows any relief consumers might derive from the slowing percentage increase." The health care reform law enacted by President Barack Obama in 2010 "has had only a limited effect" on health care costs, the report continues.
Spending on physician services will reach $6,647 and spending on hospital stays will rise to $6,531, making them the two biggest components of a typical family's annual health care expenses, the report says.
Health care costs varied among the 14 metropolitan areas that Milliman analyzed. Miami and New York City are the most expensive, with costs about 20 percent higher than the national average. The report says that Phoenix, Atlanta and Seattle were the only three cities where annual costs are projected to be less than $20,000 this year.
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These 10 states saw the greatest increase in percentage of residents who had unmet health care needs due to cost, according to a report by the Urban Institute and the Robert Wood Johnson Foundation.