U.S. health spending grew faster than the economy as a whole last year and will continue to do so through 2032, accounting for 5.5 percent of gross domestic product, according to a report released Wednesday by actuaries at the Centers for Medicare and Medicaid Services. It is expected to reach nearly 1 in 100%. Published in Health Affairs magazine.
Medicare actuaries project that U.S. health spending will increase by an average of 5.6% a year from 2023 to 2032, outpacing the projected nominal economic growth rate of 4.3% a year. As a result, health spending is projected to increase from 17.3% of gross domestic product in 2022 to 19.7% in 2032.
Health spending in 2023 grew at a rapid annual pace of 7.5%, even as the coronavirus pandemic subsided. This growth rate was faster than the 6.1% expansion of the overall economy, and health spending totaled $4.8 trillion.
Coverage rates hit historic highs: This increase reflects a broader increase in coverage rates, primarily as a result of high rates of Medicaid enrollment during the pandemic, which is now being lifted. The adoption rate is expected to reach 93.1%. The report said Medicaid enrollment reached a record high of 91.2 million people in 2023, but will drop by 102 million this year as states re-determine enrollee eligibility after a pandemic-era ban on enrollment expires. It is predicted that the number of people will decrease by 10,000,000 people (11.2%). Overall, coverage is expected to decline, but not precipitously, with enrollment growth in directly purchased plans (including plans through the Affordable Care Act Marketplace) expected. The proportion of the population with health insurance is expected to remain above 90% until 2032.
Medicare is projected to see the most growth in spending: Medicare spending will increase by 8.4% in 2023, topping $1 trillion. It is predicted to increase by 6.1% in 2024. Meanwhile, Medicaid spending is expected to increase by 5.7%, compared with a 9.6% increase in 2022, while private health insurance spending is projected to increase by 11.1% from 5.9% last year. in front. Own spending increased by 7.9%.
“Among major payers, Medicare has the highest projected 10-year average spending growth rate of 7.4 percent, compared to private health insurance (5.6 percent), Medicaid (5.2 percent), and self-pay insurance (4.7 percent). ) spending is projected to be relatively small,” the report states. “The higher average spending growth rate for Medicare from 2023 to 2032 is primarily due to the program’s projected average enrollment growth rate of 2.0%, which will increase the number of baby boomer enrollees by 2029. By comparison, average enrollment growth for private health insurance was lower at 0.3%, with Medicaid declining by 0.6% as a result of the end of the public health emergency. ”
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Hospital spending soars: Hospital spending is expected to rise 10.1% last year, up from a 2.2% increase in 2022, according to government actuaries, a change “due in part to increased utilization.” Hospital spending growth is expected to average 5.6% annually from 2027 to 2032.
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