02/28/2012 02:05 pm ET Updated Feb 28, 2012

The Top One Percent Of Patients Account For More Than 25 Percent Of Health Insurance Costs

Health insurance companies are testing ways to provide coverage to the people they have can no longer avoid: working-age people with the biggest medical bills.

The top 1 percent of people under 65 who have private health insurance account for more than 25 percent of health care costs, according to data from the IMS Institute for Healthcare Informatics cited by The New York Times. And when the major provisions of health reform take effect in 2014, health insurance companies will likely have to take on these costly patients. That's because they will no longer be able to turn away customers due to pre-existing conditions, age, gender, or health status.

For the companies, that means coming up with new ways to include this part of the population in their plans while still earning profits. Enrolling millions of younger and healthier people with lower medical costs, almost all of whom will be required by law to obtain some form of health insurance, will help, but the insurers are looking to do more.

The challenge of constraining costs is stark and so is the advantage: Just 5 percent of the U.S. population accounted for 47.5 percent of all spending on health care in 2008, according to a government study. Half of the population spent only 3.1 percent of the money. Total spending on health care reached $2.6 trillion in 2010, an increase of 3.9 percent from the prior year, federal auditors reported last month. That was 17.9 percent of the U.S. gross domestic product. The poor economy and other factors tamped down rising health care costs but they're expected to rise more in the coming years.

Big insurance companies like Aetna, Cigna, and HealthPartners are devising new ways of providing benefits to people with chronic conditions like diabetes and of paying medical providers who treat them, the NYT reports.

For patients, insurance companies can provide assistance navigating the health care system and coordinating their medical services to keep them healthy. Payments to doctors can be tied to their performance helping patients manage their chronic conditions. If these experiments work, it could mean healthier people and slower growth in national health spending.

People who get health insurance from their employers have been protected against rejection or higher premiums under a federal law put in place in the 1970s. This means insurers have experience in managing the medical bills of sicker people and they would like to apply the lessons they've learned to a market that the Congressional Budget Office says will grow by 24 million through 2019. Under the law, individuals and small business will be able to purchase insurance via "exchanges" set up in their home states that will allow them to compare plans on prices and benefits. Lower-income people will be eligible for federal subsidies to help pay for insurance.