In the last few years, health care costs for the commercial health insurance market in Washington increased by 13%, according to an analysis from the Office of the Insurance Commissioner (OIC) released this week. The increases are nearly double the rate of inflation, which was 7%.
The report attributes pharmacy, acute inpatient care, outpatient emergency and non-emergency care, and ambulance services as the highest cost drivers for commercial state plans.
OIC used data from 2016-2019 claims on Washington’s All-Payer Claims Database. This information maps changes in health care utilization and the price of each claim for people up to age 64. Average medical spending grew from $373 per member per month (PMPM) in 2016 to $422 in 2019, or 13%, according to the report.
Changes in cost and utilization of services correlate to changes in PMPM rates. For example, a 15% increase in the cost of filling a prescription increased PMPM prices for pharmacies by 19.2%, despite only a 4% increase in utilization.
On the other hand, PMPM rates for acute inpatient care remained relatively stable despite a 16% price increase. This is offset by a 13% decrease in utilization of services.
The report also found variation in price increases for specific services. For example, prices for professional medical services (such as diagnosis and assessment) and total outpatient care increased by 4% and 6%, respectively, which is below the 7% inflation rate. However, pharmacy and acute inpatient care prices increased by 16% and 15%, respectively, which is well above the inflation rate.
“Washington state has been hugely successful at improving access to health insurance for people who need coverage, and it’s something I’m very proud of,” said Insurance Commissioner Mike Kreidler in the report’s release. “But now we need to seriously tackle affordability. Understanding what’s behind the often paralyzing costs is the first step toward a solution.”
OIC plans on releasing additional data over the next few months that will analyze cost changes for prescription drugs, mental health, hospitals, and ambulance services.
Bills currently in the legislature that address health care affordability include Senate Bill 5532, which would create a prescription drug affordability board. Additionally, Attorney General Bob Ferguson recommended in his slate of Attorney General Requests House Bill 1616, which would increase eligibility for “free or reduced-cost health care at hospitals and affiliated clinics.” This includes full write-offs of out-of-pocket hospital costs for people at 100 percent to 300 percent of the federal poverty level.
Both bills have passed the chamber in which they were introduced and are currently in committee in the opposite chamber.