Health spending grows 

WASHINGTON – U.S. health care spending grew 4.1% to reach $4.5 trillion in 2022, reflecting increases in Medicaid and private health insurance, according to CMS. 

The rate of growth was faster than in 2021 (3.2%), but much slower than in 2020 (10.6%).  

In 2022, the insured share of the population reached 92% (a historic high). Private health insurance enrollment increased by 2.9 million individuals and Medicaid enrollment increased by 6.1 million individuals. In 2022, 26.6 million individuals were uninsured, down from 28.5 million in 2021 (a difference of 1.9 million individuals). 

Retail spending for durable medical equipment, which made up 2% of overall spend, increased 5.1% in 2022 to $67.1 billion, following much faster growth of 18.6% in 2021. The slowdown in 2022 was driven by slower growth in out-of-pocket and private health insurance spending. 

Health spending by major sources of funds: 

Private health insurance spending increased by 5.9% in 2022 (to $1.3 trillion), which was slightly slower than the increase of 6.3% in 2021. For hospital care, physician and clinical services, and dental services, private health insurance expenditures grew more slowly in 2022, following stronger growth in 2021. Private health insurance enrollment increased 1.5%, or 2.9 million individuals, in 2022 — the fastest increase since 2015. 

Medicare spending increased 5.9% to reach $944.3 billion in 2022, a slower increase than in 2021, when Medicare spending increased 7.2%. Medicare fee-for-service expenditures declined by 1.9% in 2022, while Medicare private health plan spending (accounting for 50% of total Medicare spending) increased 15.1%. Total Medicare enrollment increased 1.9% in 2022 compared to growth of 1.7% in 2021 (or by 1.2 million individuals), with enrollment in Medicare private plans increasing 8.5% and fee-for-service enrollment declining 3.0%. 

Medicaid spending increased 9.6% to $805.7 billion in 2022, the third consecutive year of growth above 9%. Medicaid enrollment grew 7.2% in 2022 after increasing 11.1% in 2021 and 4.6% in 2020. This amounts to about 18 million individuals gaining Medicaid coverage between 2019 and 2022. Faster Medicaid enrollment growth since 2019 reflects the newly enrolled as well as the continuous enrollment requirement of the Families First Coronavirus Response Act that took effect on March 18, 2020 and ended on March 31, 2023. Federal Medicaid spending increased 10.8% and state Medicaid spending increased 6.6% in 2022, with the federal government’s share of total Medicaid spending reaching 71% in 2022. 

Total out-of-pocket spending increased by 6.6% in 2022 to $471.4 billion, slowing from growth of 11% in 2021. Dental services, durable medical equipment, and physician and clinical services, which collectively accounted for 34% of all out-of-pocket spending in 2022, were the main contributors to the slower growth in 2022.