The health care costs for American families have tripled for the first time since 2001. A recent report found that families in the nation need to shell out more than $25,000 for health care this year.
In 2016, a typical four-member family in the United States needs to spend $25,826 in health care provided by a plan and sponsored by employers, according to an analysis from the Milliman Medical Index, or MMI. That health care cost is $1,155 pricier than the one experienced last year.
Reason Behind Higher Health Care Costs
MMI said prescription drugs that health plans and insured people pay for is a huge contributor of higher health care costs. Prescription drugs account for nearly 17 percent, or $4,270 per year, of health care's total spending.
The MMI, however, noted that this year's 4.7 percent increase in health care costs for a family of four is the lowest rate of growth since 2001. MMI co-author Chris Girod said going beyond $25,000 in health care costs is a "significant" and "unsettling" change, CNBC reported. According to the MMI, plenty of people are surprised as to why health care costs are too pricey given that some of them only visit doctors for the infrequent routine care.
Major Health Insurers Pushes For Higher Costs
Major health insurers in Oregon and Virginia have proposed health care rate hikes for 2017. Insurers in Oregon are asking regulators for a 30 percent increase while Virginia insurers are seeking for a 2 percent hike in health care costs, OCRegister reported.
Insurers like United Healthcare, Highmark and Health Care Service Corp. have lost millions of dollars in 2015. In order to compensate for the losses in revenue, insurers are increasing health care costs by double-digit percentages. This is despite the promise from the Affordable Care Act or Obamacare, which vowed to decrease premium rates by $2,500 annually for an average American family.
The Obama administration said the ACA has been successful in its initiatives including altering how Medicare pays for health services. The ACA is also convincing hospitals and doctors to create organizations that generate incomes from medical results than on fees per service, CNBC noted.
Around 155 million employees in the U.S. and their families have their health care costs covered by plans based on jobs. On the other hand, 77 million people are covered by Medicaid, a government program that caters to poor people. Fifty-seven million people have Medicare, a government program for senior citizens with ages 65 or older. Medicare also covers people under 65 with certain disabilities like permanent kidney failure.
