Three days of Supreme Court arguments have left the fate of the 2010 health care reform law uncertain. What is certain, however, is that health care costs are continuing to eat away at consumers' budgets.
The typical family of four covered under an employer plan is expected to spend over $20,000 on health care this year, up more than 7% from last year, according to early projections by independent actuarial and health care consulting firm Milliman Inc. In 2002, the cost of health care for the average family of four was just $9,235, the firm said.
The projected increase marks the fifth year in a row that health care costs will rise between 7% and 8% annually.
The Obama administration's Affordable Care Act aims to bring health care costs under control. Passed in 2010 and currently before the U.S. Supreme Court, the law is also meant to help more people get affordable health insurance coverage, including the 50 million uninsured today.
Part of the act, the individual mandate, would require nearly all Americans to buy some form of health insurance beginning in 2014 or face a financial penalty. The individual mandate would help spread health care costs to a larger pool of individuals, thus potentially lowering costs.
While employers still shoulder a majority of health care expenses, employees have been paying a larger portion of the total amount every year, according to Lorraine Mayne, principal and consulting actuary with Milliman.
This is part of a long-term trend, said Deborah Chollet, senior fellow and health economist with Washington-based Mathematica Policy Research. "Employers have been unwilling to have their benefits costs rise at the rate that health care costs have risen," she said.
As a result, they have been passing along extra costs to employees in the form of higher deductibles and co-pays, as well as more expensive premiums. Last year, workers' out-of-pocket costs rose 9.2% to $3,280 for a typical family of four, according to Milliman.
Those who buy insurance without an employer-provider plan are shelling out even more, Mayne said. The average premium for a family in a non-group plan was $7,102 in 2010, according to the nonprofit Kaiser Family Foundation.
Small business owner Matthew Cheng's health care costs rose by $600 to $7,891 last year. This year, he's looking at a much steeper bill.