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Life Health > Health Insurance > Health Insurance

CMS: Private Health Insurance Spending to Rise 2.2%

By Allison Bell

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U.S. health insurance spending may increase just a little bit in 2011, but it could grow rapidly in 2014, government researchers say.

Economists and actuaries in the Office of the Actuary at the Centers for Medicare and Medicaid Services are making those predictions in a paper published in the Web edition of Health Affairs, an academic journal that focuses on the delivery and financing of health care.

The research team, led by Andrea Sisko, an economist at the CMS national health statistics group, is estimating that overall national health expenditures increased 5.8% in 2009.

This year, in part because of the passage of the Affordable Care Act, the legislative package that includes Patient Protection and Affordable Care Act (PPACA), total national health expenditures could increase about 5.1%, the researchers estimate.

If Congress had left the old laws in place, the rate of increase might have been 3.9%, the researchers say.

The rate of increase is going up because of implementation of PPACA provisions such as the Pre-existing Condition Insurance Plan program.

Total national health expenditures will account for 17.5% of gross domestic product this year, up from 17.3% in 2009.

U.S. private health insurers may spend $864 billion in 2011, up 2.2% from the 2010 total. Private health insurance spending will slow in 2011 because of the high unemployment rate and because of the expiration of the temporary Consolidated Omnibus Budget Reconciliation Act group health benefits continuation subsidy, researchers say.

When major PPACA programs, such as the health insurance exchange coverage distribution system and coverage subsidies, take effect in 2014, private health insurance spending probably will increase about 13%, to about $1.1 trillion.

Affordable Care Act provisions could increase private health insurance spending to 32% of total U.S. national health spending in 2019, up from 30% before PPACA was enacted, the researchers say.

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