Family health care costs to exceed $20,000 this year

After his baby was born prematurely, Matthew Cheng's health care costs soared.

NEW YORK (CNNMoney) -- 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 cost to cover the typical family of four under an employer plan is expected to top $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 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.

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.

Rising costs for employees 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.

What health care reform is (and isn't) doing now

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.

In January, Cheng's wife, Talya, gave birth to a baby 12 weeks prematurely and their costs have already jumped to $12,036. As a result, Cheng has had to cut business expenses, such as advertising, to afford their care.

"Because of our baby, the health care bill is always paid first," he said.

Over the past five years, health care costs have comprised a bigger portion of the country's household budgets as expenses continue to rise and incomes remain stagnant, according to the Bureau of Labor Statistics.

Health care, including insurance, medical services, drugs and medical supplies, accounted for 6.6% of the household budget in 2010 -- the fifth consecutive year of increases.

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.

Should the Supreme Court strike down the Affordable Care Act, consumers can expect that percentage to increase even more as costs rise "very fast," Chollet said. Without the law's measures to promote preventative care and spread costs across a larger population, overall costs will rise, she explained.

Those without employer-provided health care coverage, like Cheng, will likely pay more for their plans because there will be fewer restrictions on insurers. Individuals could be denied coverage altogether because of a pre-existing health condition or offered coverage only at a very high premium, both of which are prohibited under the Affordable Care Act, Chollet added.

Those with insurance through their employer will also pay more to cover the growing number of uninsured, she said.

Still, even if the Affordable Care Act goes through, it will do little to lessen the financial burden for those who are already insured, Mayne said. "It will take other changes to really bend the cost curve and make substantial changes in health care costs," she said.