Bob Laszewski of Health Policy and Strategy Associates (no affiliation with HSA) notes that CMS’ latest health care cost report includes the following:
“in 2002, the percentage of health insurance premiums spent on profit and admin expense was 12.8%; in 2003, the expense and profit ratio had rised to 13.6%. Undoubtedly, this gain is not in expenses but in health insurance company profits.”
This occured at a time when overall health care costs were still increasing by almost 9% a year.
At the risk of stating the obvious, profits and admin expenses have increased at a rate greater than that of total medical expenses. Not only does this not say much for the “efficiency” of the private market, it also may add fuel to the argument againts private insurance.
We’ll have more details on the CMS report’s notable findings in a future post.
Jan
31
