Managed Care

Premium growth to reach 7.1% by 2015

The number of people who lost health insurance coverage because of layoffs could not be offset by an increase in the number of those using COBRA. This led to a relatively small increase in premiums for 2010.

Apparently, however, that’s going to change in the next several years, say authors of a study titled “Health Spending Projections Through 2019: The Recession’s Impact Continues,” published in the March issue of Health Affairs.

Expect to see a deceleration in private health insurance premiums in 2010 by 2.5 percent. That follows premium growth rates of 3.1 percent in 2008 and 3.3 percent in 2009.

That’s going to change by 2015, according to the study authors. Premium growth is projected to reach 7.1 percent — a reflection of an improving economy and increasing private health insurance enrollment beginning in 2012.

“Overall health spending grew faster in 2009 versus 2008, although we’re still at a relatively low level of health spending when historical accounts and projections are considered,” says Christopher J. Truffer, an actuary in the Office of the Actuary, Centers for Medicare & Medicaid Services, and lead author.

“After 2010, we’re projecting that private health spending will accelerate — a response to faster income growth and increases in private health insurance enrollment during the recovery. Once that surge passes, we’ll see a slowdown in private health insurance growth,” says Truffer.

Source: Truffer CJ, Keehan S, Smith S, et al. Health spending projections through 2019: The recession’s impact continues. Health Aff. 2010:29(3):1–8.

Private health insurance

Out-of-pocket payments

Other private funds

Estimated sources, all private funds (In billions)

Projected average annual percentage growth (%)

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