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Costs & Spending

By Jacqueline A. Fiore, Andrew J. Madison, John A. Poisal, Gigi A. Cuckler, Sheila D. Smith, Andrea M. Sisko, Sean P. Keehan, Kathryn E. Rennie, and Alyssa C. Gross National Health Expenditure Projections, 2023 – 32: Payer Trends Diverge As Pandemic Related Policies Fade ABSTRACT Health care spending growth is expected to outpace that of the gross domestic product (GDP) during the coming decade, resulting in a health share of GDP that reaches 19.7 percent by 2032 (up from 17.3 percent in 2022). National health expenditures are projected to have grown 7.5 percent in 2023, when the COVID-19 public health emergency ended. This reflects broad increases in the use of health care, which is associated with an estimated 93.1 percent of the population being insured that year. In 2024, Medicaid enrollment is projected to decline significantly as states continue their eligibility redeterminations. Simultaneously, private health insurance enrollment is projected to increase because of the extension of enhanced subsidies for direct purchase health insurance under the Inflation Reduction Act (IRA) of 2022, as well as a temporary special enrollment period for qualified people losing Medicaid coverage (after eligibility redeterminations). Over the course of 2024 – 26, the IRA expands Medicare ’ s drug benefit generosity and implements drug price negotiations for beneficiaries; concurrently, the extended enhanced subsidies for direct-purchase health insurance expire in 2026. During 2027 – 32, personal health care price inflation and growth in the use of health care services and goods contribute to projected health spending that grows at a faster rate than the rest of the economy. H ealth care spending in the US is projected to have grown 7.5 per cent in 2023, which is faster than the nominal gross domes tic product (GDP) growth rate of

doi: 10.1377/ hlthaff.2024.00469 HEALTH AFFAIRS 43, NO. 7 (2024): 910 – 921 This open access article is

distributed in accordance with the terms of the Creative Commons Attribution (CC BY-NC-ND 4.0) license.

Jacqueline A. Fiore (jacqueline .fiore@cms.hhs.gov), Centers for Medicare and Medicaid Services (CMS), Baltimore, Maryland.

Andrew J. Madison , CMS.

John A. Poisal , CMS.

Gigi A. Cuckler , CMS.

Sheila D. Smith , CMS.

Andrea M. Sisko , CMS.

Sean P. Keehan , CMS.

Kathryn E. Rennie , CMS.

Alyssa C. Gross , CMS.

tion period (2023 – 32), growth in national health expenditures is projected to average 5.6 percent and outpace the nominal GDP growth rate of 4.3 percent (calculable from ex hibit 1). Underlying this differential are faster growth in personal health care prices (measured by the Personal Health Care Price Deflator), rel ative to economywide price growth (based on the GDP Implicit Price Deflator); the continued ag ing of the population; and increasingly more demand for health care relative to income growth. These factors contribute to a health share of the economy that is projected to reach 19.7 percent by 2032.

6.1 percent, and to have resulted in a slight in crease, to 17.6 percent, in the share of the na tion ’ s economy devoted to health spending (ex hibit 1). Contributing to this higher rate of growth was an increase in the insured share of the population, which is expected to have reached an unprecedented high of 93.1 percent, largely related to a record-high level of Medicaid enrollment (exhibit 2). During the full projec

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Health Affairs July 2024 43:7

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