Healthcare costs for the average person increased 6.7% in 2025, and healthcare costs for a hypothetical family of four rose to $35,119, according to the 2025 Milliman Medical Index (MMI), which measures healthcare costs for Americans covered by a typical employer-sponsored health insurance plan.
The report, released on May 27, also found that the cost is $7,871 for an average person, while pharmacy costs increased by 9.7% and outpatient facility care costs rose by 8.5%. Ona average, healthcare costs have increased 6.1% annually since 2005.
“Pharmaceutical costs have been a leading driver of healthcare spending in recent years,” says Milliman Principal and Consulting Actuary Dave Liner. “This year, outpatient facility services and pharmacy costs together accounted for nearly 70% of the total cost increase. Much of the outpatient growth is linked to high-cost drugs administered in outpatient settings.”
In recognition of the MMI’s 20th anniversary, this edition includes a look back at how healthcare costs have evolved in the last 20 years.
“Since we began publishing the MMI 20 years ago, healthcare costs for American families have nearly tripled,” says Milliman Principal and Consulting Actuary Deana Bell. “Annual growth has averaged 6.1%, far outpacing any other household expense. No other cost category has risen as steeply or as consistently over the past two decades. Outpatient facility care saw the largest increase of any category, rising 286% since 2005, reflecting the growing complexity of procedures now handled outside of inpatient settings.”
The report notes healthcare costs rise for a number of reasons including—but not limited to—price increases and pricing structures, disease prevalence, and new medicines and technologies. Outpatient facility care and higher prescription drug costs are the top drivers of healthcare spending increases over the past 20 years.
Read this year’s MMI here.
