NEW YORK (CNNMoney) -- For the first time in 10 years, the U.S. health insurance industry is expected to report a decline in medical expenses, according to a new report by Weiss Ratings.
Weiss, an independent provider of insurance company ratings, based its findings on a study of 852 health insurers.
The study showed that medical costs fell 1.6% in the first nine months of 2010.
For all of 2010, Weiss estimates that insurers' medical expenses,will fall 3% less 'reinsurance costs' bought by health insurers to limit risk.
"This is a critical change from the steady and rapid increases of prior years," said Gavin Magor, senior insurance analyst for Weiss.
"If it continues in 2011, it should help boost health insurer profits while also pressuring them to curb premium increases and give consumers some much-needed relief."
Insurers have been increasing premiums between 6% and 8% every year, blaming the increases on the annual double-digit increases in cost of medical care.
Recently, Blue Shield of California had proposed a premium rate hike of as much as 59%.
That makes the Weiss report even more startling.
Said Magnor, "It is a significant finding and it's hard to pinpoint the reasons for this change in trend at this point."
Even though total enrollment in health insurance declined slightly in 2010
, Magnor said that downtick was not large enough to push medical costs lower.
However, Michael McRaith, director of Illinois department of insurance, says that while medical costs are actually rising, insurers may have taken steps to counteract the increases.
"It may be that as health care costs become increasingly expensive, insurers are more aggressively excluding people from coverage, denying payment of claims or more aggressively pricing coverage so that fewer people can afford to pay premiums," McRaith said.
"Any one of those reasons could explain why insurers are paying less or flat amounts on medical expenses at the same time that some publicly-traded insurers are reporting massive profits to shareholders," he said.
The report showed that among the companies that reported a decline in medical costs, Aetna's (AET, Fortune 500) medical expenses fell by 14.1% in the first nine months of 2010 versus the same period a year earlier.
Keystone Health Plan West's medical costs also fell by 11.1% in that period.
However, that decline wasn't felt across the board. Group Health's medical costs rose more than 16% while Blue Cross of Idaho saw a 12.9% increase in medical expenses in that period.
Weiss' study was based on mandatory data on medical expenses that health insurers provide to the National Association of Insurance Commissioners.
America's Health Insurance Plan, the trade group of health insurers, was not immediately available to comment on the report.
As Elon Musk cancels the latest launch of a SpaceX rocket, he's also got some "horrible nightmares" to contend with. More
Tech fans are already excited about the launch of Apple's iPhone 6 next month. There's now a report suggesting that the iWatch could be coming too. Wall Street is pleased. More
Utah State professor Michael Glauser cycled 4,000 miles this summer, visiting 100 entrepreneurs across the country. Here's a snapshot of how they grew their businesses. More
Mary Fallon, from Durham, Maine, is a mother of three children, two dogs, 25 chickens and a flock of 22 sheep. Here are journal entries from a day in her life. More