CMS analysts: Health cost growth falls again

By Allison Bell

September 19, 2013 at 05:06 AM

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U.S. health insurers' spending on health care could grow 6.2 percent per year between now and 2022, up from a growth rate of 3.4 percent this year.

Economists and actuaries in the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS) have included that projection in a paper published in the Web edition of Health Affairs, an academic journal.

Gigi Cuckler and other CMS analysts are estimating that overall national health expenditures are rising 3.8 percent this year, down slightly from 3.9 percent in 2010, 2011 and 2012.

Health expenditures will eat up about 18 percent of U.S. gross domestic product this year, up from 17.9 percent last year, the analysts estimate.

The analysts expect the rate of growth to jump to 6.1 percent next year, as the Patient Protection and Affordable Care Act (PPACA) Medicaid expansion and public exchange programs start up.

The net cost of insurance — the difference between premiums earned and benefits paid — could increase 8.2 percent this year, to $180 billion, and it could increase 11 percent next year, to $199 billion, the analysts say.

Although the net cost of insurance is growing relatively quickly, actual spending on private health insurance is probably growing just 3.4 percent this year, the analysts say.

The analysts see the amount of private health insurance premiums per enrollee growing 3.2 percent.

Changes in plan design are helping to hold down plan costs by reducing prescription drug spending and discouraging use of office visits, the analysts say.

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