Milliman, Inc., a global consulting and actuarial firm, has announced plans by Milliman Financial Risk Management (FRM) to list two active ETFs designed to meet the rising cost of US healthcare.
Filed with the SEC, the firm writes that the Milliman Healthcare Inflation Guard ETF (MHIG) and the Milliman Healthcare Inflation Plus ETF (MHIP) will be the first members of a distinct lineup of ETFs aimed at solving some of the most prominent but unaddressed financial risks that challenge both workers and retirees, as well as companies, institutions, and governments.
Intending to list in Q1 2026, the ETFs are:
The Milliman Healthcare Inflation Guard ETF (MHIG) will seek to meet the healthcare costs for an average individual utilising an employer-provided health plan in the United States over time, while
The Milliman Healthcare Inflation Plus ETF (MHIP) will aim to exceed US healthcare cost inflation over time.
“With Milliman ETFs, we’re drawing on nearly 80 years of actuarial expertise to address financial risks that are impacting society at every socioeconomic level. The rising cost of healthcare is such a complex, foundational issue—and it is one that our clients and most all Americans have been grappling with. Healthcare inflation is a great place for us to start carefully crafting ETF solutions, and they fit squarely with Milliman’s mission to protect the health and financial well-being of people everywhere,” says Bret Linton, Milliman’s Chair.
“Following multiple years of healthcare cost inflation well above the rate of goods in the broader economy, health insurance premiums are set to rise the most in 15 years. Managing and planning for cost increases, also known as the healthcare trend, has been central to our work, but clients have lacked a formulaic way to invest this multi-hundred-billion-dollar pool of capital that aims for an investment return equal to healthcare inflation. The data-driven investment solutions we intend to offer will provide a new tool for all stakeholders in the industry—and individuals—to manage this risk and potentially realign incentives,” says Hans Leida – Principal & Consulting Actuary.
Milliman Healthcare Inflation ETFs will use an actively managed mix of health sector and related equities, bonds (US Treasuries, TIPS, and corporate bonds), and alternatives, including commodities and liquid alts strategies, in seeking to generate returns (before fund fees and expenses) that generally correlate with the healthcare cost changes for an average individual utilising an employer-provided health plan in the United States.
The multi-asset portfolios will use a quantitative model based on Milliman FRM’s extensive research and analysis on the assets’ interrelationships and interactions with the path of healthcare inflation. The firm writes that the model aims to dynamically manage volatility to minimise portfolio losses during drawdowns in the underlying assets, which could prevent the ETFs from corresponding with inflation over time.
“Today marks an exciting day for Milliman, our clients in the health ecosystem, and their end clients: the American people. With the Healthcare Inflation ETFs, we have developed a set of initial investment strategies guided by our unique data and analytics to address a risk that insurers, hospital systems, provider groups, and individuals all share: the rising cost of healthcare. We feel these first-of-their-kind ETFs could be a core holding for health insurers and providers in their capital base, as well as for individuals within their Health Savings Accounts (HSA) or retirement portfolios,” says Adam Schenck, Principal & Managing Director, Fund Services, Milliman FRM.
Individuals or their financial advisers could allocate to Milliman Healthcare Inflation ETFs in their tax-advantaged Health Savings Account (HSA), 401(k), and/or individual retirement accounts (IRAs). Currently, there is an estimated USD150 billion in HSAs3, USD13 trillion in defined contribution plans, and USD18 trillion in IRAs.
Milliman’s 2025 Retiree Health Cost Index5 estimates that the average 65-year-old couple retiring in 2025 will spend approximately USD588,000 for medical costs in their retirement, assuming enrollment in Medicare; however, this excludes costs for long-term care, dental, or over-the-counter medications.
According to the 2025 Milliman Medical Index (MMI)6, the cost of healthcare for a hypothetical family of four in a typical employer-sponsored health plan is now USD35,119, up from USD12,214 in 2005 at the launch of the MMI.
“This near tripling in cost represents a 6.1 per cent average annual increase from 2005-2025. Healthcare is the fourth largest consumer expenditure, behind only housing, transportation and food, according to Labor Department data, and total healthcare related spending constitutes 17.6 per cent of US GDP, according to Centers for Medicare and Medicaid Services.
“More broadly, the Milliman ETFs lineup will join our consultancy’s wide-ranging expertise and proprietary data with FRM’s quantitative investment capabilities to create strategies that address underrepresented risks faced by both individuals and institutional investors. Until now, savers, companies, and governments have used more traditional investments and portfolio approaches that have not necessarily matched the specific risk profiles of the corresponding financial challenges. We look forward to listing the Milliman Healthcare Inflation ETFs and sharing more purpose-built solutions aimed at protecting investors’ financial well-being soon,” says Schenck.
