CMS expects national health spending to reach $7.7 trillion by 2032, with 2023 expenditures projected to have hit $4.8 trillion and have grown by a rate of 7.5%.
From 2023 to 2032, health spending is expected to grow by an average of 5.6% per year, according to a June 12 news release from CMS.
11 things to know:
- National health spending is expected to have grown faster than the economy in 2023, according to CMS, increasing its share of the GDP from 17.3% in 2022 to 17.6% in 2023. Over the next decade, CMS projects health spending to grow by 5.6% per year on average, which is faster than the expected economic growth rate of 4.3%.
- By 2032, CMS projects health spending to make up 19.7% of the GDP.
- CMS anticipates Medicare spending to grow at an average rate of 7.4% between 2023 and 2032. From 2030 to 2032, CMS projects that the growth rate will decrease to 7% due to slower enrollment increases once the final baby boomers enroll by 2029.
- CMS projects Medicaid spending to grow by an average rate of 5.2% between 2023 and 2032. Enrollment declines expected in 2023 and 2024, according to CMS, will be due to the end of continuous enrollment provisions from the Families First Coronavirus Response Act. Enrollment is expected to stabilize after 2024 as eligibility processes normalize.
- Private health insurance spending is expected to grow at an average annual rate of 5.6% between 2023 and 2032.
- Out-of-pocket spending is projected to grow at an average annual rate of 4.7% between 2023 and 2032.
- Hospital spending is expected to have an average annual growth rate of 5.7% between 2023 and 2032.
- Spending on physician and clinical services is projected to have peaked at 8.4% growth in 2023, compared to 2.7% in 2022, and to average 5.6% growth annually from 2023 to 2032.
- Growth in retail prescription drug spending is expected to be lower in 2023 at 7%, down from 8.4% in 2022, with an average annual growth rate of 6% projected for 2023 to 2032.
- Non-government sponsors of healthcare, including businesses, households and other private revenues, are expected to maintain a similar share of total health spending in 2032 as in 2022, at 51% and 52%, respectively.
- The total government spending share, including federal, state and local contributions, is projected to decrease to 46% in 2024 from 48% in both 2023 and 2022, before rising to 49% by 2032.