Industry News

On March 28, 2022, the Office of the Actuary at the Centers for Medicare & Medicaid Services’ (CMS) released the projections for national health expenditures for 2021 through 2030. The National Health Expenditure Accounts (NHEA) measures annual U.S. expenditures for health care goods and services, public health activities, government administration, net cost of health insurance, and investments related to health care. 

According to CMS, national health care spending in 2021 slowed to 4.2% from 9.7% in 2020. The near-term expected trends reflect significant declines in supplemental funding for public health activity and other federal programs from $417.6 billion in 2020 to $286.8 billion in 2021 due to the COVID-19 pandemic. Under current law, national health spending is projected to grow at an average rate of 5.1% per year from 2021 through 2030, reaching $6.8 trillion by 2030.  As a share of the gross domestic product (GDP), health care spending is projected to remain nearly the same at 19.7% in 2020 and 19.6% in 2030. 

By 2024, federal, state and local governments are projected to finance 46% of total national health spending, down from a record high of 51% in 2020. The decrease is mainly due to the expected decline in COVID-19 federal supplemental funding between 2021 and 2024.

Among the major payers for health care, projected growth in average annual spending for Medicare (7.2%) and Medicaid (5.6%) are significant contributors to the rate of national health expenditure growth from 2021 through 2030.

From 2021 through 2030, private health insurance spending is projected to average 5.7%. During this time period, out-of-pocket expenditures are projected to increase at an average rate of 4.6% and represent 9% of total spending by 2030, down from 9.4% in 2020. In addition, retail prescription drug spending is projected to increase by an average of 5% per year, hospital spending growth is projected to average 5.7%, and physician and clinical services spending is projected to increase an average of 5.6% per year. 

The insured share of the population with health insurance is expected to be 91.1% in 2021 and projected to be 89.8% in 2030. 

The summary report is available here and additional information is available here.