Committees Active on This Topic

Additional Resources

Drivers of 2019 Health Insurance Premium Changes Issue Brief
June 2018, Academy of Actuaries (AAA)

Important Issues for Consumers, Insurers and Insurance Regulators
March 2018, CIPR Newsletter

Cost Drivers in Healthcare
March 2017, Alliance for Health Reform

Healthcare Cost Drivers White Paper
June 2015, National Association of Health Underwriters


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Brian Webb
Health Policy Team Manager

NAIC Center for Insurance Policy and Research (CIPR)

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Health Care Cost Drivers

Last Updated 7/12/2018

Issue: The U.S. system for delivery of healthcare is not working optimally for those seeking care. According to the Centers for Disease Control and Prevention (CDC), the per capita national health expenditures in 2015 were $9,9901. Further, the total national health care expenditures in 2015 were $3.2 trillion2. These amount far exceeds that of other industrialized countries, yet by just about every measure the overall health of U.S. residents is not better than those other countries. In fact, by most health measures the U.S. is among the worst.

The total national healthcare expenditures represent 17.8% of the Gross Domestic Product3 and are expected to continue to grow. These costs are clearly unsustainable for us as a nation.

Many misperceive the solution lies in "fixing" health insurance. However, while entities that cover healthcare costs can play an important role in containing some costs, for the most part the insurance mechanism simply passes along the underlying healthcare costs. It is in these underlying systemic costs where the real, long-term solutions lie.

Status: In 2018, the NAIC will study healthcare cost drivers in an effort to gain insights into the issue. Specifically, the NAIC Health Insurance and Managed Care (B) Committee will study these cost drivers and report findings and recommendations. Center for Insurance Policy & Research (CIPR) will also issue a study on health care cost drivers. Among the things the study will include is exploring a value-based reimbursement model, life style changes, electronic health records (EHR), technology driven delivery channels and medical technology advances.

1 Accessed Jan. 4, 2018 based on 2015 data.
2 Ibid
3 ibid