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Tuesday, September 15, 2015

Health Care Reform Articles-September 15, 2013

Examining Who Runs the United States

No, Bernie Sanders is not going to bankrupt America to the tune of $18 trillion

 

The actuarial service firm Milliman recently released the its 2015 Medical Index, which tracks the hypothetical costs of a family of four with health insurance coverage through an average employer-sponsored preferred provider organization.
Initiated in 2001, this index is unique in that it measures the collective costs of healthcare benefits instead of focusing on just an employer’s share or the premiums.
To no great surprise, the MMI index rose in 2015, reaching $24,671, compared to $23,215 in 2014 and $22,030 in 2013. The 5.4 percent cost increase in 2014 was the smallest in the history of the MMI, but 2015 represents a larger percentage increase (6.3 percent). Since the initial reading in 2001, the MMI index has shown an almost tripling of costs.
This year, prescription drug costs are leading the charge. Pharmaceutical costs grew by 13.6 percent over the previous year, considerably higher than the 6.8 percent average growth over the last five years.
Thanks to this increase, 15.9 percent of the total healthcare spending for the hypothetical family of four is now taken up by prescription drug costs.
All costs are increasing, but the employee’s portion of the cost is increasing at a higher rate. Defined as the total of payroll deduction and out-of-pocket costs, over the last five years, the employee’s cost burden has increased by almost 43 percent compared to 32 percent for employer’s costs. For 2015, employer contributions covered 58 percent of the costs ($14,198) while employee costs of $10,473 were split between $6,408 in employee contributions (26 percent of the total) and $4,065 in out-of-pocket costs (16 percent of the total).
Broken down into the components of spending, the largest components are inpatient facility care and professional services (physicians and other support personnel). Both take up 31 percent of the cost. Outpatient care takes up 19 percent of the costs; pharmacy charges are 16 percent of the costs; and the remaining 9 percent covers miscellaneous costs — things such as medical equipment, home health care, and ambulance transport.


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