A new analysis by Avalere found that causes of health insurance premium increases in 2016 generally reflected healthcare spending in the individual and small group market.
Avalere, a custom analytics company servicing the healthcare business and policy industry, examined the medical portion of premium increases. The study compared premium increase justifications by insurance companies for benefit categories in 2016 to actual market spending reports in 2014.
Below are five conclusions from Avalere's report that indicate spending trends in the healthcare market.
1. Inpatient and outpatient hospital services primarily drove premium increases in the past year.
2. Across individual and small group markets, premiums increased $25.26 per month from 2015 to 2016. Outpatient hospital services accounted for the largest portion of that increase at $5.44.
3. Prescription drugs' impact on premiums remains roughly in line with actual market spending in 2014.
4. Professional services (e.g. doctor's visits) drove a smaller portion of premium increases relative to their share of healthcare spending.
5. Physician and professional services account for 21.5 percent of premium rate increase in 2016 compared to a 53.4 percent increase attributed to hospital services.
The study utilized data from the 2016 Unified Rate Review Template with the Department of Health and Human Services. The URRT reports average per-member per-month premiums for the upcoming plan year in each health plan.
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