Private health insurance spending might rise 5.7%

CMS actuaries update national health expenditure projections

CMS actuaries say the United States might spend $3.5 trillion on health care this year. (Photo: CMS) CMS actuaries say the United States might spend $3.5 trillion on health care this year. (Photo: CMS)

U.S. private health insurers might spend about $1.2 trillion this year, or 5.7 percent more than they spent in 2016.

Total health care spending could increase 5.4 percent, to $3.5 trillion, or about 18.3 percent of the U.S. gross domestic product.

Private insurers might have $235 billion left over after paying claims, or 8.7 percent more sales, administration, taxes and profits than they had in 2016.

Related: Annual health costs seen hitting $4.3 trillion by 2017, report finds

Sean Keehan and other analysts at the Office of the Actuary, part of the Centers for Medicare & Medicaid Services, have included these figures in a new set of national health expenditure projections, for the period from 2016 through 2015.

The report is behind a paywall on the website of Health Affairs, an academic journal that focuses on health care delivery and health care finance systems. The actuaries prepare the projections each year to help government officials, private insurers, employers and others plan health care programs.

The projections for 2025 show that the country spend about $5.5 trillion, and 19.9 percent of GDP, on health care in 2025.

The analysts assume when they prepare the projections that continue laws will stay in place, and they include projections for the cost both of acute health care and long-term care.

Nursing home spending, for example, might grow to $260 billion in 2025, from $162 billion this year. Home health spending might grow to $170 billion, from $94 billion, because of the aging of the baby boomers, the analysts say.

But the analysts say the current unsettled state of health policy in Washington makes forecasting for 2025 especially difficult.

"There is considerable uncertainty regarding how the nation's health care will be delivered and paid for going forward," the analysts write.

In recent years, spending has been much lower than CMS forecasters had feared. In 2008, for example, CMS forecasters predicted that the United States would be spending $4.5 trillion, and 19.5 percent of GDP, on health care in 2017. Those predicted spending levels are much higher than what the actual 2017 spending levels are likely to be.

Related:

Analysts: Private health plan spending may rise 4% per year

CMS actuaries: Health premiums might be 6.4% higher

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