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Life Health > Health Insurance

Some projected net health insurance costs go poof

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The amount of cash U.S. private health insurers had left over after paying claims grew more slowly in 2014 than government analysts had expected.

Analysts at the Centers for Medicare & Medicaid Services (CMS) now are saying that the net cost of private health insurance, or the difference between health insurers’ premium revenue and their health benefits costs, increased just 12.4 percent in 2014, to $195 billion.

In July, when CMS analysts published the 2014 national health expenditure (NHE) projections, the analysts were estimating that the net cost of insurance had increased 15.5 percent in 2014, to about $200 billion.

See also: Forecasters see 13 percent health insurance spending jump

The analysts also cut their estimate of private health insurance spending growth. The analysts now say spending increased 4.4 percent in 2014, to $991 billion.

In July, the analysts were saying 2014 private health insurance spending had increased 6.1 percent.

Anne Martin, a CMS economist, and other CMS analysts have included the actual 2014 health spending figures in a NHE published behind a paywall at Health Affairs, an academic journal that focuses on health care delivery and health care finance systems.

The analysts found that overall U.S. national health expenditures increased 5.3 percent, to $3 trillion. The actual spending growth was only slightly different from the 5.5 percent 2014 growth projection published in July.

CMS includes long-term care (LTC) spending figures in the NHE figures, and the CMS analysts found U.S. costs grew significantly faster than they estimated back in July.

Spending on nursing home care increased 3.6 percent in 2014, to $156 billion, and spending on home health spending increased 4.8 percent, to $83 billion.

Originally, the CMS analysts were estimating nursing home spending had increased just 2.8 percent, and that home health spending had increased just 2.6 percent.

Actual spending on noncommercial medical research fell 2 percent, to about $46 billion.

In July, analysts estimated research spending had dropped 1.8 percent. Noncommercial U.S. medical research has decreased every year since 2011.


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