National Health Expenditure Projections, 2023-32: Payer Trends Diverge As Pandemic-Related Policies Fade

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.