After skyrocketing in the first year of the COVID-19 pandemic and then falling almost as dramatically a year later, health care spending in the U.S. is set to rise a little more than 4% in 2022, the federal government said, to 4.5%. Reached trillion dollars.
Annual growth in the nation’s health care spending appears to be returning to pre-pandemic trends, according to a new report from analysts at the Centers for Medicare & Medicaid Services, or CMS. The report was published online in the journal Health Affairs.
According to CMS, in the four years before 2020, the first year of the COVID-19 pandemic, health care spending grew from 4.2% to 4.6% per year.
While last year’s increase was more than the 3.2% increase in health spending in 2021, it was less than half the 10.6% increase in health spending in 2020.
The pattern reflects the volatility associated with the COVID-19 pandemic and the federal government’s critical response, CMS statistician Micah Hartman said in a briefing for reporters on the report.
CMS produces annual reports on national health care expenditures, which various government agencies, including the White House Office of Management and Budget, rely on when preparing economic and budgetary forecasts and plans.
With slower growth in spending compared to 2020 and 2021, the share of health care in the country’s overall economy was 17.3% in 2022. This was a 19.5% decline from the year before the pandemic, the highest share recorded by National. Health expenditure accounts.
Hartmann said national health spending accelerated significantly in 2020, primarily due to unprecedented COVID-19 supplemental funding and public health spending. The result was that the share of GDP dedicated to health reached 19.5% in 2020.
The findings for 2022 mirrored the pre-pandemic picture from 2016 to 2019, when health care’s share of the economy ranged between 17.4% and 17.6%.
The current trend is less dramatic than long-term CMS forecasts, which project health care spending increasing an average of 5.4% per year through 2031 and accounting for one-fifth of the nation’s economy by then.
spending more on medicines
At about 9% of total health care spending, spending on prescription drugs grew faster than other sectors. Retail spending on prescription drugs totaled $405.9 billion in 2022, an 8.4% increase from 2021 after increasing 6.8% from 2020.
The Biden administration has attempted to cut prescription drug prices through the Inflation Reduction Act, which includes provisions to reduce monthly insulin costs and negotiate lower drug prices for certain drugs covered under Medicare. Are. And last week, Biden said the administration could break patents on drugs made with taxpayer money if they cost too expensive.
As overall spending on health care increased modestly, the cost of care paid by patients and their insurance providers, public or private, rose less rapidly in 2022. According to the report, the medical price index increased by 3.2%. , while overall inflation reached 7.1% that same year, a rate not seen in four decades.
Insured at all-time high
CMS reported that the percentage of Americans with health insurance reached an all-time high of 92% in 2022. Aaron Catlin, deputy director of the CMS National Statistics Group, said this was due to continued coverage for Medicaid patients during the pandemic, as well as measures that allowed more U.S. residents to get health insurance through the health insurance marketplace established under the Affordable Care Act. Provided access to. ,
CMS economist Anne Martin said Medicaid enrollment is expected to increase by 6.1 million in 2022, the result of a requirement for continued Medicaid coverage enacted by Congress in early 2020. This requirement expired earlier this year and the Medicaid programs are in the process of being phased out, requiring enrollees to establish their eligibility for the program.
Medicaid saw the largest increase in health care spending by 9.6% in 2022, totaling $805.7 billion. Medicare spending is projected to increase 5.9% to $944.3 billion in 2022, while Medicare enrollment increased 1.9%, Martin said.
Enrollment through the ACA marketplace increased by 1.7 million and employer-sponsored insurance enrollment increased by 1.5 million. Martin said the 1.5% increase in private insurance coverage in 2022 is the fastest growth and enrollment since 2015.
Subsidies on premiums for individual insurance purchased through the ACA marketplaces, first implemented under the American Rescue Plan Act and later expanded in the 2022 Inflation Reduction Act, have led to strong enrollment in marketplace plans, Catlin said.
Private health insurance and Medicare each saw a 5.9% increase in spending. Consumers’ out-of-pocket health care spending, which includes copays and other types of unreimbursed medical expenses, but not health insurance premiums, rose 6.6%.
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