In 2022, U.S. healthcare spending in increased 4.1 percent to $4.5 trillion, or $13,493 per person (with per capita growth of 3.7 percent), according to an analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS).
The findings, published online by Health Affairs, indicate that in 2022 strong growth in Medicaid and private health insurance spending was offset by continued declines in supplemental funding by the federal government associated with the COVID-19 pandemic. Overall, healthcare spending growth in 2022 was faster than the 3.2 percent growth in 2021, but much slower than the rate of 10.6 percent in 2020.
The report notes that the healthcare spending increase of 4.1 percent in 2022 was much slower than growth in the nominal gross domestic product (GDP), which increased 9.1 percent. In 2022, the share of the economy devoted to healthcare spending, as measured by the GDP, declined to 17.3 percent, lower than both the 18.2 percent share in 2021 and the highest share in history of 19.5 percent in 2020. On a per capita basis, national health spending grew 3.7 percent.
Growth in total healthcare spending in 2022 reflected a slowdown in personal health care spending (goods and services) that was more than offset by faster growth in non-personal healthcare spending. The slowdown in personal health care spending was due to slower growth in spending for hospital care (from 4.5 percent in 2021 to 2.2 percent in 2022), dental services (from 18.2 percent in 2021 to 0.3 percent in 2022), and physician and clinical services (from 5.3 percent in 2021 to 2.7 percent in 2022). Non-personal health care spending accelerated in 2022 due largely to a turnaround in the net cost of insurance.
Medicaid and private health insurance spending also influenced growth in healthcare spending in 2022. Medicaid spending increased 9.6 percent in 2022 after growth of 9.4 percent in 2021 and 9.3 percent in 2020. Over the period of 2019-22, cumulative Medicaid spending increased 31 percent, or 9.4 percent per year on average, and enrollment accounted for most of the growth as it increased 24.6 percent. Private health insurance spending increased 5.9 percent in 2022 after an increase of 6.3 percent in 2021 and a decline of 0.8 percent in 2020.
“Healthcare expenditures since 2020 have reflected volatile patterns associated with the COVID-19 pandemic and the federal government’s response to the public health emergency,” said Micah Hartman, a statistician in the CMS Office of the Actuary and first author of the Health Affairs article, in a statement. “The growth in healthcare spending in 2022 of 4.1 percent was more consistent with the pre-pandemic average annual growth rate of 4.4 percent over 2016-19. It remains to be seen how future healthcare spending trends will materialize, as trends are expected to be driven more by health-specific factors such as medical-specific price inflation, the utilization and intensity of medical care, and the demographic impacts associated with the continuing enrollment of the baby boomers in Medicare.”
The number of uninsured individuals declined for the third consecutive year, from 28.5 million in 2021 to 26.6 million in 2022, as the insured share of the population increased to 92.0 percent—a historic high. Marketplace enrollment increased by 1.7 million people in 2022, and employer-sponsored insurance enrollment increased by 1.5 million people, accounting for 86 percent of total private health insurance enrollment and 88 percent of spending. Medicaid enrollment increased by 6.1 million people in 2022. (However, at least 11,967,000 Medicaid enrollees have been disenrolled as of Dec. 7, 2023, based on the most current data from all 50 states and the District of Columbia, according to KFF.)
Retail prescription drug spending reached $405.9 billion in 2022 and represented 9 percent of overall health spending. Growth in retail prescription drug spending was 8.4 percent in 2022, faster than the 6.8 percent growth in 2021. The increase in spending growth for retail prescription drugs was due to several factors, including faster growth in utilization and prices as well as shifts in the mix of drugs purchased.
