The effort to make patients better health care shoppers by increasing theirout-of-pocket costs seems to be working,according to actuaries at the Centers for Medicare and MedicaidServices (CMS).

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A team of CMS actuaries and economists says moves to increasepatients' out-of-pocket costs, or “give them more skin in the game,” appear to be working tohold down overall U.S. health care spending.

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Gigi Cuckler and other analysts at the CMS Office of the Actuarytalk about the effects of high-deductible plans on health care costs intheir latest batch of national health expenditure projections.

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“The share of covered workers who are enrolled inhigh-deductible plans was 28 percent in 2017, compared with just 5percent in 2007,” the analysts write, in a paper published behind apaywall on the website of Health Affairs, an academic journal.

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“Enrollment in high-deductible plans tends to constrain the useof health care goods and services, particularly when the initialenrollment shift occurs,” the analysts write.

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Use of high-deductible plans probably contributed to a0.9-percent-point-drop in hospital care spending growth andphysician and clinical services spending growth in 2017, theanalysts write.

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But, because the percentage of people in high-deductible plansis likely to level off in the next few years, the effect of use ofhigh-deductible plans on future increases in spending could leveloff around 2021, the analysts predict.

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In the article, the analysts also give details about how theythink the U.S. health care sector performed in 2017, and how itmight perform from now through 2026.

2017

The analysts say the United States spent $3.5 trillion, or $18percent of its $19 trillion in gross domestic product, on all kindsof health care and related goods and services in 2017.

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Overall health care spending was 4.6 percent higher than in2016. The rate of increase was up from 4.3 percent between 2015 and2016.

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Private health insurance accounted for $2.6 trillion of 2017health care spending, up 5.6 percent in 2016.

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Patients' out-of-pocket spending increased 4.6 percent, to $365billion.

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Total health care expending per person increased 3.6 percent.For 2016, the per-capita increase in health spending was 3.5percent.

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The net cost of health insurance, or the amount spent onadministering health coverage and, for example, paying agentcommissions, increased 8.1 percent, to $238 billion.

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The net cost of health insurance increased so much partlybecause private insurers increased their premiums in 2017, due toproblems with underpricing in 2016, the analysts write.

The future

The analysts expect national health expenditures to increase 5.3percent this year, to $3.7 trillion, and they expect the country tospend $5.7 trillion on health care and related costs in 2026.

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If the analysts' projections hold, health spending could accountfor 19.7 percent of gross domestic product in 2026.

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The net cost of health insurance could rise 7.8 percent thisyear, to $256 billion, and it could rise to $409 billion in2026.

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Allison Bell

Allison Bell, ThinkAdvisor's insurance editor, previously was LifeHealthPro's health insurance editor. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached at [email protected] or on Twitter at @Think_Allison.