TL/DR –
Actuarial firm Milliman’s Financial Risk Management (FRM) team will list two exchange-traded funds (ETFs) aimed at hitting healthcare costs for the average individual using employer’s health plans in the US. The Milliman Healthcare Inflation Guard ETF (MHIG) and Milliman Healthcare Inflation Plus ETF (MHIP) will use an active mix of health sector equities, bonds and other assets. Milliman FRM currently oversees $229bn in assets.
Milliman’s Risk Management Team Introduces ETFs for Rising US Healthcare Costs
Milliman’s risk management team is launching two active exchange-traded funds (ETFs) to tackle soaring healthcare costs in the U.S. The firm’s Financial Risk Management (FRM) division will add Milliman Healthcare Inflation Guard ETF (MHIG) and Milliman Healthcare Inflation Plus ETF (MHIP) to its ETF lineup to counter financial threats to governments, institutions, companies, employees, and retirees.
The MHIG aims to cover healthcare expenses for individuals using employer-sponsored health plans in the U.S., while the MHIP intends to outpace U.S. healthcare cost inflation over time, Milliman reported.
The ETFs will employ an actively managed blend of health sector and related equities, U.S. treasuries, TIPs, corporate bonds, and alternatives such as commodities and liquid alternative strategies. The goal is to generate returns that correlate with cost shifts for individuals enrolled in employer-sponsored health plans. These portfolios will use a quantitative model based on Milliman FRM’s healthcare inflation research and analyses.
Milliman’s chair, Bret Linton, noted that the rising healthcare costs are a complex and foundational issue that many Americans struggle with. He added that these ETF solutions align with Milliman’s mission of safeguarding people’s health and financial well-being.
Healthcare costs have been escalating, and it is predicted to rise further. Milliman’s 2025 Retiree Health Cost Index estimates that an average 65-year-old couple retiring in 2025 will spend approximately $588,000 on medical costs in retirement, excluding long-term care, dental, or over-the-counter medications expenses.
A Fidelity analysis found that an average 65-year-old couple would spend around $172,500 on healthcare costs in retirement, a 4% increase from the previous year.
Milliman principal and consulting actuary, Hans Leida, emphasized that managing and planning for cost increases is central to their work. He added that their data-driven investment solutions would offer a new tool for all industry stakeholders and individuals to manage this risk.
The ETFs could be used in health savings accounts (HSAs) and individual retirement accounts (IRAs) by workers or their financial advisors. Presently, the Milliman Financial Risk Management team advises $229 billion in assets.
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