Milliman Medical Index
Employee Benefits

Healthcare Swimsuit Issue

Den Bishop
Den Bishop
Senior Advisor

The annual Milliman Medical Index is to healthcare actuaries what the Sports Illustrated swimsuit issue is to teenage boys. It’s highly anticipated, and the images inside are somewhat shocking, hardly believable, but completely irresistible. It’s the report in which the healthcare and health insurance worlds financially disrobe for public viewing. Since you were probably embarrassed to view the 2017 Milliman Medical Index on your screen at work for fear your co-workers might see or it might actually be NSFW (“not suitable for work” for the non-millennials reading this post), I will summarize the highlights for you.

Here’s what you missed…$26,944!

What’s $26,944? That’s the average cost of healthcare services for the average working-age family of four in the United States.

  • The average employee cost for a family of four is $8,870 including per paycheck and out-of-pocket healthcare expenses for deductibles, copays, etc.
  • At 4.3 percent inflation, 2017 represents the lowest annual inflation rate since Milliman began producing the report in 2001.
  • Even though the inflation rate is the lowest ever recorded, the cost increased $1,118 per family over the prior year.
  • Working eight hours per day for 250 days per year, an employer pays $7.63 per hour for a family of four’s healthcare. The employee must earn $5.84 just to fund their family’s share of healthcare expenses.

Even with the lowest inflation recorded, the cost per family is too high and the inflation rate is unsustainable. Unfortunately, the debate in D.C. is centered around entitlement programs, subsidies, and taxes on the wealthy rather than focusing on the more than 170 million Americans who receive their health insurance through their work. The cost is too high for American employers and for workers and their families. The shift in cost from public programs, like Medicare and Medicaid, to private insurance is contributing to the annual cost that is multiple times the rate of inflation for employers and their workers.

Similar to some of the Sports Illustrated swimsuit images, you have to wonder whether these numbers are real. No airbrush has touched the Milliman numbers. Let’s look at the career cost for a 26-year-old who moved off of Mom and Dad’s insurance in 2017. Let’s assume our new hire stays single for a few years, gets married at age 29, and has kids two years later. The employee maintains full family coverage for 26 years and then returns to employee plus spouse coverage through age 64 at which point they retire and move to Medicare. How much is the career healthcare cost based on the best ever 4.3 percent annual inflation rate?

The answer is $2,224,381. Talk about financial pornography! Using the best recorded healthcare inflation rate puts the projected career healthcare cost at almost $2.25 million for a single employee who covers themselves and their eligible family members. The numbers are real…and they are shocking!

The Democrats, Republicans, Representatives, and Senators are all taking their political positions in the never-ending healthcare reform debate, but none of them are talking about what is happening to employers and the employees who are working for them.

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