U.S. health care spending exploded in the first year of the COVID-19 pandemic and then slowed almost as dramatically a year later, but in 2022 health care spending will rise to just over $4.5 trillion, the federal government said.
Annual growth in the nation’s health care spending appears to be returning to pre-pandemic trends, according to a new report by analysts at the Centers for Medicare and Medicaid Services, or CMS. The report was published online in the journal Health Affairs.
In the four years leading up to 2020, the first year of the COVID-19 pandemic, health care spending grew from 4.2 percent to 4.6 percent annually, according to CMS.
While in recent years the increase was greater than the 3.2 percent increase in health spending in 2021, it was less than half of the 10.6 percent increase in health care spending in 2020.
This pattern reflects the volatility associated with the COVID 19 pandemic and the significant response of the federal government, CMS Statistician Micah Hartman said in a briefing for reporters about the report.
CMS produces the annual National Health Expenditure Report, which is relied on by several government agencies, including the White House Office of Management and Budget, to prepare economic and budget projections and plans.
When spending growth was slower compared to 2020 and 2021, the share of healthcare in the national economy in 2022 was 17.3 percent. That was down from the first year of the pandemic, 19.5 percent, the highest rate ever recorded by national statistics. Health spending accounts.
In 2020, public health spending accelerated significantly, mainly due to unprecedented additional funding for COVID-19 and public health spending, Hartman said. The result was that in 2020 the share of healthcare in the gross national product rose to 19.5 percent.
The findings for 2022 repeated the pre-pandemic picture from 2016 to 2019, when the share of healthcare in the economy varied between 17.4 and 17.6 percent.
The current trend is less dramatic than longer-term CMS projections, which see health care spending grow by an average of 5.4 percent per year through 2031 and take a fifth of the national economy by then.
Higher spending on drugs
Expenditures for prescription drugs, about 9% of total healthcare expenditures, grew faster than other segments. Retail spending on pharmaceuticals was $405.9 billion in 2022, up 8.4% from 2021, after growing 6.8% from 2020.
The Biden administration has tried to cap prescription drug prices with an anti-inflation law that includes provisions to lower the cost of monthly insulin and lower the price of some drugs covered by Medicare. And last week, Biden said the administration could infringe the patent on drugs made with taxpayer money if their costs are too high.
While overall health care spending rose modestly, the cost of care, how much patients and their insurers, public or private, pay for the care they receive, rose less sharply in 2022. The medical price index rose 3.2 percent, according to the report. , although in the same year headline inflation was 7.1%, not seen in four decades.
Insured at an all-time high
The percentage of Americans with health insurance will reach an all-time high of 92 percent in 2022, CMS reports. That was due both to continued coverage for Medicaid patients during the pandemic and to measures that gave more Americans access to health insurance through the health insurance marketplace created by the Affordable Care Act, said Aaron Catlin, deputy director of CMS’s National Statistics Group. .
Medicaid enrollments are expected to increase by 6.1 million in 2022, thanks to continued Medicaid coverage enacted by Congress in early 2020, CMS economist Anne Martin said. That requirement ended earlier this year, and Medicaid programs are in the process of unwinding by requiring enrollees to verify their eligibility for the program.
Medicaid had the largest single increase in health care spending, at 9.6 percent, to a total of $805.7 billion in 2022. Medicare spending grew 5.9 percent to $944.3 billion in 2022, Martin said, while Medicare enrollment grew 1.9 percent.
The number of people enrolled through the ACA marketplace increased by 1.7 million, and enrollment in employer-sponsored insurance increased by 1.5 million. The 1.5 percent increase in private insurance coverage in 2022 was the fastest growth and enrollment since 2015, Martin said.
Catlin said premium subsidies for individual policies purchased through the ACA marketplace, first introduced under the American Rescue Plan Act and later expanded by the Inflation Reduction Act of 2022, helped increase participation in marketplace plans.
Spending on private health insurance and Medicare increased by 5.9 percent. Consumers’ out-of-pocket healthcare spending, which includes deductibles and other unreimbursed medical expenses but does not include health insurance premiums, increased by 6.6%.
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