Investor Presentaiton
Medicare spending was to $2.9 billion in 2021, representing 34 percent of state THCE.
Per capita spending on Medicare increased 8.0 percent to $12,982, while enrollment
increased 1.0 percent.
Medicaid spending totaled $2.7 billion, accounting for 32 percent of state THCE
in 2021. On a per capita basis, Medicaid spending decreased 0.9 percent to $7,123.
Enrollment in Medicaid increased 8.7 percent, in part due to federal requirements
to maintain continuous coverage during the COVID-19 public health emergency. It is
likely that some of those with continuous coverage obtained private employer-based
coverage prior to or during 2021 and did not incur Medicaid spending, therefore
causing decline in the Medicaid growth rate.
Aggregate spending on NCPHI totaled $661.1 million in 2021. NCPHI represents the
administrative costs of providing private health insurance and accounted for 8 percent
of THCE in 2021. On a per capita basis, NCHPI decreased 12 percent from 2020. During
the height of the pandemic in 2020, insurers saw a large increase in NCPHI due to
decreased health care utilization (and therefore, decreased medical expenses). In 2021,
utilization patterns returned to anticipated levels, which drove NCPHI spending down
from its previously elevated levels (for more information on NCPHI, see the sidebar).
Exhibit 2.3: Aggregate TME, Per Capita TME, and Growth in
Per Capita TME by Market, 2020-2021
Understanding the Net
Cost of Private Health
Insurance
NCPHI captures the cost of
administering private health
insurance for Rhode Island
residents. It is broadly defined
as the difference between
the premium revenue health
plans receive on behalf of
Rhode Island residents and the
spending incurred for covered
benefits for those same members.
NCPHI includes insurers' costs
of paying bills, advertising,
sales commissions, and other
administrative costs. Because plan
premiums are set prospectively
based on historical claims data
and actuarial assumptions, NCPHI
can vary significantly from year
to year depending on how closely
actuarial projections match
actual spending on health care
services.
12.0%
9.7%
9.0%
8.0%
6.0%
3.0%
Target 3.2%
0.0%
-0.9%
-3.0%
-6.0%
-9.0%
-12.0%
Commercial
Medicaid
Medicare
$2.3B
$2.7B
$6,171
$7,123
Source: OHIC analysis of TME data from insurers, CMS, and the Rhode Island EOHHS.
Aggregate Spending
Per Capita Spending
$2.9B
$12,982
12
Annual Report: Health Care Spending and Quality in Rhode IslandView entire presentation