Skip to main content
House of Delegates
Medical Student Section
Resident and Fellow Section
CME Requirements for Relicensure
Controlled Substance Prescribing
For CME Providers
About the FMA PAC
Make a Donation
The 1000+ Club
Join The 1000+ Club
Mission / Vision
The Foundation for Healthy Floridians
Councils and Committees
House of Delegates
2023 Board of Governors
Join / Renew
CMS Releases Official Projected U.S. Health Expenditures for 2021-2030
By Jarrod Fowler, MHA FMA Director of Health Care Policy and Innovation | Updated March 31, 2022
On Monday, March 28, the CMS Office of the Actuary
released its official projections
for National Health Expenditures (NHE), which are designed to capture all spending on healthcare in the United States. These estimates have been published since 1960 and are considered the “official” healthcare spending projections by government officials, who rely upon the information. The projections include breakdowns of expenditures by goods and services (e.g., hospital services, physician services, and drug expenditures), by payer type (commercial insurance, Medicaid, Medicare, etc.) and sponsor (e.g., businesses, households, and federal and state governments). Also included are data on public health expenditures, infrastructure investments, certain types of research, insurance enrollment estimates, and uninsured estimates.
One key finding from the report is that NHE growth slowed to 4.2% in 2021, down from 9.7% in 2020, largely due to expiration of supplemental federal funding related to the COVID-19 public health emergency. The report also concludes that, between 2021 and 2030, total National Health Expenditures are projected to grow an average of 5.1% per year, reaching an annual spending level of $6.8 trillion by 2030. However, as a share of GDP, NHE are expected to be at 19.6% in 2030, which is roughly the same level of spending observed in 2020. However, healthcare spending in the U.S. whether measured by GDP or per capita spending, is projected to continue being considerably higher than that of other developed economies.
Between 2021 and 2030, Medicare spending growth is expected to average 7.2%, the fastest rate of any payor included in the report. The Office of the Actuary does note, however, that Medicare spending growth will begin to slow by 2030, in part because baby boomers will no longer be enrolling in the program.
Comparatively, Medicaid is projected to grow at an average rate of 5.6% over the same period. But in the short term, Medicaid spending is expected to slow to 2.7% in 2023 because of declining enrollment related to the expiration of COVID-19 relief, which temporarily prevented states from culling ineligible beneficiaries from their rolls. As states will once again begin disenrolling beneficiaries who are no longer eligible for Medicaid, some decline in spending is expected. Medicaid spending is expected to pick back up thereafter.
Also of note is that physician and clinical services are also expected to grow an average of 5.6% per year over 2021 to 2030. Comparatively, hospital spending growth is projected to be 5.7%, on average, over the same period. Meanwhile, retail prescription drug costs are expected to grow by an average of 5%.
Why it matters
Projecting future national healthcare expenditures at any point in time is difficult. However, while the Office of the Actuary expects a normalization of healthcare spending, which is generally driven by demographic and economic factors, these projections are subject to additional uncertainty created by the COVID-19 virus. The Office of the Actuary closes its report by stating, “Only time will tell how normal the next decade is.”