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Family
Health Spending to rise rapidly...Costs are
becoming unsustainable for families with
Employee-Sponsored Care
By
Sonia Sekhar
Escalating health care costs threaten to
erode the income of the more than 160
million people who depend on
employer-sponsored coverage.
Without real changes to our health care
system, annual health care spending for
families of four with employer-sponsored
coverage will grow from nearly $17,000 today
to over $39,000 by 2019—or from 19 percent
of family income to 31 percent.
Most American families depend on
employer-sponsored insurance for their
health coverage.
Yet premiums and out-of-pocket expenses for
families with employer-sponsored plans are
rising at an unprecedented pace.
Without health reform, health care costs
will continue to eat away at family budgets,
compromising families’ ability to pay their
bills, buy a home, or save toward long-term
goals such as their retirement or their
children’s education.
Health
reform promises to
slow cost growth by promoting
cost-saving innovations, improving payment
systems, reducing waste and inefficiencies,
and
modernizing the health care
infrastructure.
The uninsured are not the only ones who
stand to gain from health reform—the
millions of Americans who receive coverage
from their employers will also see
improvements in their coverage.
Methodology
The
Milliman Medical Index measures annual
employer and employee spending on health
insurance premiums, as well as employee
out-of-pocket cost sharing.
We calculated the MMI’s historical average
annual rate of growth to trend forward the
annual health care spending for a typical
family of four with employer-sponsored
coverage.
For family income, we relied on Current
Population Survey
historical median income tables of
families by size, and because
employer-provided health insurance is part
of compensation, and added MMI estimates of
the employer contribution to premiums.
We developed income projections based on the
CBO’s average annual wage increase
projections, and calculated its
historical average annual rate of growth to
trend forward the employer share of
premiums.
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