2 August 2016 - Despite all the emphasis being put on the cost of prescription drugs, outpatient spending is expected to be the largest driver of premium increases in 2017, according to an analysis by Avalere Health, an independent consulting firm.

The research found that outpatient spending accounts for 29.9 percent of rate increases and makes up 27.4 percent of insurance plans’ spending. Contrary to recent headlines and claims from insurers that prescription drugs are to blame for rising insurance costs, the analysis found that prescription drug spending represents a smaller portion of rate increases.

The study was conducted by analyzing the proposed rate filings of individual and small group plans in nine states. The analysis found premium drivers vary widely by state.

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

Read Morning Consult article