Outpatient spending expected to be largest driver of premium increases in 2017

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Outpatient spending is expected to push premiums up in 2017, according to a new analysis from strategic advisory company Avalere. Claims data from 2015 shows outpatient spending accounts for 29.9 percent of 2017 rate increases and represents 27.4 percent of spending in these plans.

In previous analysis of premiums data, Avalere found outpatient spending accounted for 28.9 percent of premium increases — the highest contributing factor across six categories.

The analysis of proposed rate filings includes data from nine states, including Connecticut, Maryland, Maine, Ohio, Oregon, Rhode Island, Virginia, Vermont and Washington.

Here are three more findings from Avalere's analysis.

1. Prescription drugs represent a smaller portion of rate increases than their share of overall healthcare spending based on proposed rates made by individual and small group plans across the nine states analyzed, Avalere found. Specifically, prescription drugs account for 14.3 percent of premium growth in 2017. This rate is lower than in 2015, when health plans spent 17.7 percent of total medical spending on drugs.

"Preliminary data indicate that drugs are not likely to have a disproportionate impact on premiums in 2017," Caroline Pearson, senior vice president at Avalere, said in a statement. "Instead, outpatient spending continues to drive premium increases."

2. Notably, costs for inpatient care appear to be tapering off and are only expected to contribute 15.4 percent of 2017 premium increases, despite accounting for 19.6 percent of spending in 2015, according to the analysis.

3. The Avalere analysts note drivers of premium increases vary widely across plans and states. Among the states analyzed, drugs account for a higher portion of premium increases than their share of spending in five states. Meanwhile, in four states, drugs make up a smaller percentage of premium increases than their share of spending.

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