U.S. health care spending to increase to $4.5 trillion in 2022; return to pre-pandemic growth rate – Wisconsin Examiner

U.S. health care spending soared in the first year of the COVID-19 pandemic before falling back almost as sharply a year later, growing just over 4% to $4.5 trillion in 2022, the federal government announced Wednesday.

Annual growth in U.S. health care spending appears to be returning to pre-pandemic trends, according to a new report from analysts at the Centers for Medicare and Medicaid Services (CMS).this Report Published online Wednesday 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 between 4.2% and 4.6% annually, according to CMS.

Although last year’s increase was higher than the 3.2% increase in medical spending in 2021, it was less than half of the 10.6% increase in medical spending in 2020.

The pattern reflects the volatility associated with the COVID-19 pandemic and the significant federal response, CMS statistician Micah Hartman said during a briefing with reporters on the report.

CMS produces an annual report on the nation’s health care spending that various government agencies, including the White House Office of Management and Budget, rely on when developing economic and budget forecasts and plans.

Spending growth has slowed compared with 2020 and 2021, with health care accounting for 17.3% of the country’s overall economy in 2022. That’s down from 19.5% in the first year of the pandemic, the highest share of health care spending accounts the nation has ever seen.

Hartman said state health spending accelerated significantly in 2020, largely due to unprecedented COVID-19 supplemental funding and public health spending. As a result, the proportion of GDP spent on health in 2020 reached 19.5%.

The 2022 findings echo pre-pandemic conditions from 2016 to 2019, when health care’s share of the economy hovered between 17.4% and 17.6%.

Current trends are less dramatic than long-term CMS predictThe report predicts that health care spending will grow by an average of 5.4% per year through 2031, when it will account for one-fifth of the national economy.

Increased drug spending

Prescription drug spending accounts for about 9% of total health care spending and is growing faster than other areas. Total drug retail spending in 2022 will be US$405.9 billion, an increase of 8.4% from 2021 and an increase of 6.8% from 2020.

The Biden administration has attempted slow Adjust prescription drug prices through the Inflation Reduction Act, which includes provisions to lower the monthly cost of insulin and negotiate lower prices for certain drugs covered by Medicare.Last week, Biden said the government has the power to Breaking drug patents If it’s too expensive, develop it using taxpayer dollars.

The cost of care paid by patients and their public or private insurance companies will increase smaller in 2022, as overall health care spending increases slightly. The report showed that the medical price index rose by 3.2%, while the overall inflation rate reached 7.1% in the same year, which has not been seen in four decades.

Insurance amount reaches record high

CMS reports that in 2022, the proportion of Americans with health insurance reached an all-time high of 92%. This is due to continued coverage for Medicaid patients during the pandemic and allowing more U.S. residents to obtain health insurance through the health insurance marketplaces established by the Affordable Care Act, said Aaron Catlin, deputy director of the CMS National Statistics Group. measures.

CMS economist Anne Martin said Medicaid enrollment increased by 6.1 million people in 2022 as Congress enacted requirements for continued Medicaid coverage in early 2020.That requirement ended earlier this year and Medicaid has included process of relaxation Participants are asked to determine their eligibility for the program.

Medicaid spending will see the largest increase in health care spending, rising 9.6% to a total of $805.7 billion in 2022. Martin said Medicare spending will grow 5.9% in 2022 to $944.3 billion, while Medicare enrollment will grow 1.9%.

Enrollment through the ACA marketplace increased by 1.7 million, and employer-sponsored coverage increased by 1.5 million. Martin said private insurance coverage will increase by 1.5% in 2022, marking the fastest growth and enrollment since 2015.

Catlin said premium subsidies for individual coverage purchased through the ACA marketplaces, first implemented under the American Rescue Plan Act and later expanded in the Inflation Reduction Act of 2022, have helped drive enrollment increases in marketplace plans.

Private health insurance and Medicare spending both increased 5.9%. Consumer out-of-pocket health care spending, which includes copays and other forms of unreimbursed medical expenses but excludes health insurance premiums, increased 6.6%.

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