The Medical Cost Time Bomb. Milliman Just Built Two ETFs to Defuse It

How These ETFs Work: Data Meets the Market

The foundation of these ETFs lies in data.

Milliman is not a traditional asset manager.

It is one of the most established providers of healthcare cost benchmarking in the United States, advising major insurers and public programs. That expertise is embedded directly into the investment process.

At the core of the strategy is Milliman’s proprietary Health Trend Guidelines, a dataset built on the real-world costs, utilization patterns, and claims data of roughly 35 million insured Americans. This dataset serves as a reference point for how healthcare inflation is evolving in practice, not just in theory.

The portfolios themselves are actively managed and diversified across multiple asset classes.

Rather than concentrating solely on healthcare equities, the funds allocate across a broader mix that includes healthcare-related stocks, U.S. Treasuries, Treasury Inflation-Protected Securities, and select alternative strategies.

The objective is to capture the segments of the market that tend to benefit from rising healthcare costs while maintaining a degree of balance and risk control.

A key component of the approach is the dynamic allocation framework.

Milliman has identified relationships between healthcare cost trends and specific market assets.

As those trends shift, the portfolios are adjusted accordingly, with monthly rebalancing designed to keep exposures aligned with current conditions.

The two ETFs offer distinct objectives. MHIG focuses on tracking healthcare inflation as closely as possible, acting as a defensive allocation. MHIP takes a more assertive approach, aiming to exceed the rate of healthcare inflation over time.

Why the Healthcare Hedge Matters

The scale of the challenge is significant. A 65-year-old couple retiring today is expected to spend close to $588,000 on healthcare throughout retirement. For families, the burden is already visible.

Annual healthcare costs now exceed $35,000 for a typical household of four, nearly three times the level seen in 2005.

Traditional savings tools often struggle to keep pace. Healthcare costs are rising at a rate above 7 percent annually, well ahead of yields available on cash or standard fixed income products. Even tax-advantaged vehicles such as Health Savings Accounts are underutilized, with a large majority of balances left uninvested.

These ETFs are positioned as a potential solution to that mismatch. They offer a dedicated strategy aimed at aligning investment growth with one of the largest and most unpredictable expenses investors face.

Risk management is also central to the design. By combining diversified exposures with a rules-based allocation process, the funds seek to limit drawdowns during periods of market stress. The goal is not only to grow assets, but to preserve capital so that it is available when healthcare expenses arise.

In that sense, these ETFs reflect a broader shift in portfolio construction. The focus moves beyond general wealth accumulation toward targeting specific liabilities.

“We all feel the impact of rising healthcare costs. The launch of MHIG and MHIP is a historic moment for Milliman, our clients, and anyone who is concerned about healthcare costs. Milliman is the only firm with the data, healthcare expertise, and investment capabilities to make these healthcare cost hedging solutions possible. We’ve provided the gold standard in health cost benchmarking since 1956, and our tools are still the premier source for insurers, providers, and company health plans. Now we’re combining that data and intelligence working across the healthcare ecosystem with our industry leading managed risk investment capabilities, trusted by life insurers and institutions since 1998. Today, we bring these combined abilities onto the New York Stock Exchange with the Milliman Healthcare Inflation ETFs,” said Bret Linton, Chair of Milliman.

About Milliman & Milliman Financial Risk Management

Founded in 1947, Milliman leverages deep expertise, actuarial rigor, and advanced technology to develop solutions for a world at risk. We help clients in the public and private sectors navigate urgent, complex challenges—from extreme weather and market volatility to financial insecurity and rising health costs—so they can meet their business, financial, and social objectives. Our solutions encompass insurance, financial services, healthcare, life sciences, and employee benefits.

Founded in 1998, Milliman Financial Risk Management (FRM), the advisor on the Milliman Healthcare Inflation ETFs, is a global leader in managed risk investing, specializing in strategies designed to control risk. FRM advises on approximately $242 billion in global assets as of 12.31.25

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.