Outpatient care and pharmacy costs were the main drivers of the 6.2% increase in healthcare expenses for a family of four from 2024 to 2025, according to the latest Milliman Medical Index.
Milliman has tracked healthcare costs for 20 years and noted in its 2025 report that the composition of a typical family and the distribution of healthcare costs have shifted since its inception. The organization has introduced an interactive tool to model costs based on individual family compositions and now includes the impact of pharmacy rebates on drug financing.
Six notes:
1. In 2025, healthcare costs for a family of four with employer-sponsored coverage is $35,119, up from $33,067 in 2024.
2. Healthcare costs for the average person increased 6.7%, from $7,378 in 2024 to $7,871 in 2025.
3. Outpatient facility care and pharmacy are the primary drivers of the increase, with pharmacy costs rising 9.7% and outpatient facility care costs rising 8.5% year over year.
4. Annual cost increases since 2005:
- Outpatient facilities: 286%
- Pharmacy: 234%
- Inpatient facilities: 167%
- Professional services: 155%
- Other services: 70%
5. Employers are still shouldering the majority of healthcare costs, but their share decreased from 61% in 2005 to 58% in 2025. Employee payroll contributions rose from 21% in 2005 to 27% in 2025, and out of pocket spending decreased from 18% to 15%.
6. Milliman projects that pharmacy rebates in 2025 will be 31% to 33% of allowed drug costs for an average person within the commercial large group market.
