AHIP Statement on National Health Expenditure Data
Administrative Costs’ Share of Premiums Declines for Seventh Straight Year
Washington, DC – New National Health Expenditure Accounts data released by CMS today show that health spending in the United States grew at 4.0 percent in 2009. Although the recession has brought a reduction in the rate of increase in health care costs, the data show costs continue to grow faster than the overall economy and the portion of GDP devoted to health care continues to increase.“The continued rise in health care costs is not sustainable,” said Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP). “According to CMS, 2009 saw the largest ever increase in health care spending as a percentage of GDP. Rising health care costs threaten our economic competitiveness, make health care coverage less affordable, and crowd out other urgent national priorities. We urge policymakers to work on a bipartisan basis to pass reforms that will control the soaring cost of medical care.”
Ignagni noted that health insurance premiums continue to grow at a slower rate than spending on medical benefits. According to CMS, the “growth in per enrollee spending on benefits (6.3 percent in 2009) increased more rapidly than premiums.”
Moreover, the report found that the percent of premiums that went towards health plans’ administrative costs “fell from 12.4 percent of total private health insurance spending in 2008 to 11.1 percent in 2009, continuing a decline that began in 2004.”