Family Healthcare Costs Decreased Last Year For First Time In Milliman Report’s 16-Year History

June 1, 2021

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Source: Healthcare Dive, by Samantha Liss

Dive Brief:

  • * Healthcare costs for a family of four decreased year over year from 2019 to 2020, a first in the 16-year history of the annual Milliman Medical Index report. The COVID-19 pandemic was responsible for the decline, as people deferred care. Milliman, an actuarial firm, relies on claims data from 2019 and a chunk of 2020 to project trends for 2021.
  • * The annual cost of healthcare for a family of four was $26,078 in 2020, 4.2% lower than the year prior based on Milliman’s projections. In fact, all categories Milliman examined — except for one, pharmacy costs — were lower year over year.
  • * However, the trend is not expected to continue into 2021. Healthcare costs are expected to jump nearly 9% to $28,256 in 2021 for a family of four. The Milliman Medical Index measures the projected total cost of healthcare for a traditional family with an employer-sponsored PPO plan.

Dive Insight:

The dip in healthcare costs is not all that surprising given the now well-documented decline in utilization throughout 2020.

“What we’re seeing is that healthcare trend took a sabbatical due to the pandemic,” one of the authors said in a statement.

As many as one-third of U.S. adults put off care last year over fears of being exposed to the novel coronavirus, according to a previous report from the Urban Institute and Robert Wood Johnson Foundation.

That sparked fears over the potential for missed diagnoses that could lead to long-term health consequences. It also raised concerns about significant pent up demand for care.

However, those fears have somewhat dissipated. All major U.S. insurers hiked their forecasts for 2021, signaling some optimism despite the ongoing, though declining, pandemic in the U.S.

Some analysts were concerned there could be a significant surge of people returning for care in 2021, which would weigh heavily on insurers who pay for services.

Still, Milliman expects a hefty rebound in utilization as its projected cost growth for 2021, nearly 9%, exceeds historical increases.

“As we look ahead to 2021, we are faced with more uncertainty than ever before,” Milliman’s report states.


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