Healthcare costs for a family of four decrease for the first time in history
Healthcare costs for a hypothetical family of four in 2020 were $26,078, compared to $27,233 in 2019.
Photo: Emir Memedovski/Getty Images
For the first time in the 16-year history of the Milliman Medical Index, healthcare costs for a family of four have actually decreased, with the numbers dipping primarily because of the COVID-19 pandemic, the annual MMI report found.
The MMI, published by actuarial firm Milliman, measures healthcare costs for individuals and families receiving coverage from an employer-sponsored preferred provider plan.
The ongoing public health emergency bore witness to a 4.2% decrease in healthcare costs. Based on restated claims data, healthcare costs for a hypothetical family of four in 2020 were $26,078, compared to $27,233 in 2019.
WHAT'S THE IMPACT?
Delayed or avoided care in 2020 was more than enough to offset the costs of COVID-19 testing and treatments, the report found, meaning that in all categories of healthcare costs – inpatient, outpatient and professional services – were lower.
The only area that didn't see a decline was prescription drug costs. Mail order deliveries of drugs surged in 2020, and costs continue to increase.
Looking forward, employer-sponsored healthcare costs for individuals and families are expected to jump in 2021. The cost of healthcare this year for the MMI family of four is projected to be $28,256, and $6,516 for an average individual.
That's because of patients' expected return to the doctor, which will cause healthcare costs to grow by an estimated 8.4% – a higher growth rate than in the past, and higher than GDP growth over the past five years.
To understand how employees may feel the impact of these changes in cost, the MMI also calculated both employer and employee contributions to healthcare.
From 2019 to 2021, employees will see an estimated cumulative 4% increase in their total average costs (employee contributions, plus out-of-pocket expenses incurred at point of care), while employers will see a 4.2% bump in their portions of their employee benefit costs. This will be driven by the resumption of care that may have been deferred during the pandemic.
THE LARGER TREND
A January survey from West Health and Gallup found Americans remain skeptical that the nation will succeed in lowering healthcare costs anytime soon. They are three times more likely to believe the COVID-19 pandemic is headed in the right direction than is the cost of healthcare (27% versus 8%), and are placing greater confidence in putting an end to a more than year-long pandemic than reversing decades of high healthcare prices.
Only 28% report that they think the Biden Administration and Congress will be able to enact policies that will bring down the cost of healthcare, compared to 49% who are pessimistic and 22% who have no opinion one way or the other. Similar margins were found for policies related to lowering the costs of prescription drugs. This may explain why 80% of respondents felt healthcare costs will only continue to rise over the next two years.
Making care more accessible and affordable is one of the Biden Administration's stated goals as it looks to strengthen the Affordable Care Act, the signature piece of health legislation passed by former President Barack Obama.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
