Rising Healthcare Costs: A Look at the 2023 Milliman Medical Index
Healthcare Costs on the Rise
According to the 2023 Milliman Medical Index, the cost of healthcare for a hypothetical American family of four under an employer-sponsored PPO plan has reached $31,065. This number reflects the expenses families incur for healthcare benefits, excluding administrative costs, pharmacy rebates, or insurance company profits. The MMI provides a unique perspective by considering the total cost of healthcare, rather than just premiums or the employer's share of costs.
An Overview of Historical Trends
The report highlights a significant shift in healthcare costs over the past few years. After a – historically first – drop in 2020, healthcare costs surged in 2021 and have continued to rise in 2023. This upward trend surpasses the growth in gross domestic product (GDP) over a comparable period. While the 4.8 percent annual growth rate since 2021 is moderate compared to the 13 percent increase witnessed in 2020-2021, it aligns with historical MMI trends that were observed before the COVID-19 pandemic.
Anticipating Future Healthcare Costs
Looking ahead, the 2023 Milliman Medical Index projects an estimated 5.6 percent growth in healthcare costs for the MMI family from 2022 to 2023. However, this projection comes with a caveat - the U.S. healthcare sector faces an elevated level of uncertainty due to evolving macroeconomic conditions. Factors such as labor market dynamics, supply chain challenges, shortages of healthcare providers, and the need for increased price transparency in healthcare all contribute to this unpredictability.
The 2023 Milliman Medical Index underscores the ongoing challenge of rising healthcare costs for American families. With healthcare expenses outpacing GDP growth and presenting a significant financial burden, understanding these trends is essential for informed decision-making. As the US healthcare system navigates various uncertainties, policymakers, healthcare providers, and individuals must collaboratively work towards sustainable solutions that ensure quality healthcare remains accessible without causing an excessive financial burden.
For more detailed insights and information, you can read complete MMI report on the Milliman website.