A typical American family of four will experience the lowest annual increase in its health care bill this year since 2001. But the annual increase — 4.7 percent — still far outpaces that family’s average annual income growth by more than double.

This information comes from the Millman Medical Index, a survey of family health care spending that actuarial consulting firm Millman initiated in 2001. The latest results demonstrate that the national effort to restrain the spiraling costs of health care are working, to a degree. Not long ago, the index showed a 9 percent annual increase. Nonetheless, families are being forced to budget even more for medical costs every year.

Millman reported that its average family upon which the index is based now spends more than $25,000 per year on medical costs. That cost includes out-of-pocket expenses. This year’s overall increase was $1,155 over last year’s cost and, Millman notes, is the 11^th consecutive time the annual increase has exceeded the $1,000 mark.

“The MMI surpassed $25,000 this year, a significant and somewhat unsettling milestone," says Chris Girod, co-author of the Milliman Medical Index. "Given the steep cost increases we’ve seen in the 15 years we’ve been studying health care costs for the typical American family, in this year’s report we reflect on how we got to this point and where we go from here.”

While most components of medical cost followed historic increase patterns, one stood out: the cost of prescription drugs.

“Cost changes related to prescription drug coverage have been more volatile, with drugs becoming a larger portion of family health care expenditures — this year reaching 17 percent of their total,” Millman reports. “While that number requires a caveat — it does not include prescription drug manufacturer rebates that employers may receive for specialty and other high-cost drugs — it also points to the increasingly important role that drug costs play in a family's cost of care.”

Another telling stat from the index: For those covered by employer sponsored plans, the ratio of employer share to employee share has shifted from 61/39 percent in 2001 to 57/43 percent today.

But the trend is our friend, Millman says.

“The steady decline in annual cost trends over the 15 years we've tracked the MMI provides a ray of hope,” says Scott Weltz, co-author of the MMI. “Hopefully the current and future efforts to control costs will continue this trend.”

Instant Insights /

2016 family health care spending to rise &lsquo;only&rsquo; 4.7 percent

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2016 family health care spending to rise ‘only’ 4.7 percent