Family medical spending has lowest increase in past five years

From 2007 to 2008, the average medical spending for a U.S. family of four increased at the lowest rate in five years. The rate of increase also declined for the second straight year, according to the 2008 Milliman Medical Index covering employer-sponsored plans.

According to the annual study, the total medical cost in 2008 for a typical American family of four will be $15,609, compared with $14,500 in 2007 – a 7.6% increase. The 2007 rate of increase was 8.4%. The dollar figure includes costs paid by an employer-sponsored benefit plan and out-of-pocket costs paid by employees.

A number of factors continue to combine to push medical costs higher for employers and employees, according to the study. They include increases in wages and the cost of materials, improved technology and new drugs, economic incentives for providers, consumer demand, an aging workforce, benefit mandates and regulations, and cost shifting.

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