New federal government health spending figures show how the Affordable Care Act and other cost control efforts are slowing private health insurers’ administrative spending.
Total national health expenditures, or NHE, increased 5.8 percent in 2015, to $3.2 trillion, according to new data from actuaries at the Centers for Medicare & Medicaid Services (CMS).
That health spending increase rate was up from 5.3 percent in 2014.
The U.S. gross domestic product, or total national income, rose just 3.7 percent in 2015. Because health spending grew faster than GDP, health spending ate up 17.8 percent of GDP in 2015, up from 17.4 percent in 2014, and up from 17.2 percent in 2013.
Some of the increase in health spending was because of growth in the U.S. population, but the amount of health spending per person also increased faster than GDP. Per-person health spending increased 5 percent in 2015, to $9,990 per person.
The Medicare actuaries summarized the information in a report published behind a log-in wall by Health Affairs, an academic journal that focuses on health care finance and delivery efforts. The actuaries have published the data used in the report on the CMS website.
Here’s a look at some of the details, drawn from the Health Affairs report and the underlying data:
Net cost of insurance
The government tracks two types of insurance spending: overall payer spending and “net cost of insurance” expenditures.
The overall spending figures include the cost of paying the patients’ medical bills.
The net-cost-of-insurance figures include just what an insurer or some other entity, such as Medicare, spends on its offices, employees, agent commissions, compliance lawyers, websites and other sales, general and administrative costs.
An analysis of the underlying data shows that private health insurers’ net-cost-of-insurance spending increased just 2 percent in 2015, to $127 billion, or about 4 percent of total U.S. health spending.
An increase in the net-cost-of-insurance expenditures at Medicare, Medicaid and other government health programs drove up the total rate of increase in the net cost of health insurance to 7.6 percent.