The Office of the Actuary preliminarily estimates that national health expenditures grew 7.5% to $4.8 trillion in 2023 and equaled 17.6% of GDP, and that health spending inflation outpaced the 6.1% nominal GDP growth rate for the year. The actuaries will publish its final accounting of 2023 spending later this year. Healthcare expenditures grew 4.1% in 2022, 2.7% in 2021 and 10.3% in 2020, the year the COVID-19 pandemic began, the office previously reported.
The CMS actuaries expect healthcare spending to rise 5.2% in 2024.
Near-term spending trends will be influenced by diminished spending on COVID-19 and shifting health coverage trends, the actuaries conclude. For example, health insurance exchange enrollment has grown while the Medicaid rolls have shrunk as a result of eligibility redeterminations since April 2023.
Related: National health spending hit $4.5T in 2022: CMS actuaries
“The expected declines in Medicaid enrollment after the end of the COVID-19 public health emergency and key provisions under the [Inflation Reduction Act of 2022] regarding enhanced marketplace subsidies considerably affect trends in healthcare spending and enrollment,” the report says.
But those effects will fade over time, the actuaries wrote. "Health spending and enrollment patterns are expected to resemble their longer-term trends more closely and to be driven to a greater extent by traditional economic and demographic factors,” the report says.
The Office of the Actuary also notes that Medicare spending will continue to rise as baby boomers age. Medicare expenditures increased 8.4% to just over $1 trillion last year, according to preliminary estimates. If that projection for 2023 proves correct, it would be the first year Medicare spending exceeded $1 trillion.
“Among the major payers, Medicare has the highest projected 10-year average spending growth rate, mainly because of enrollment into the program,” the report says.
