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US data: 2023 healthcare spending grew faster than GDP, insurance rates hit record high

TraderKnows
TraderKnows
06-14

Recently, the United States published a series of federal data showing that the growth of healthcare spending has outpaced GDP growth, and the country's insurance coverage rate has reached an all-time high.

According to federal data, U.S. healthcare spending is projected to grow by 7.5% in 2023, reaching $4.8 trillion, exceeding the anticipated annual GDP growth rate of 6.1%.

Medicaid and private health insurance expenditures are driving this increase, with the insured population in the United States reaching a record high of 93%, according to the Centers for Medicare & Medicaid Services (CMS).

The rise in insured individuals is primarily attributed to high enrollment in Medicaid, with 91.2 million people benefiting from this federal and state program for the poor in 2023.

Medicare spending is expected to grow by 8.4%, surpassing $1 trillion, while Medicaid spending is projected to increase by 5.7%, reaching $852 billion. Private health insurance expenditures are anticipated to rise by 1.1%, totaling $1.4 trillion.

In 2023, per capita healthcare spending in the U.S. was approximately $14,423, and it is forecast to reach $15,074 in 2024.

National healthcare spending is expected to grow by 5.2% in 2024, despite an 11.2% decline in Medicaid enrollment, as continuous coverage policies expire with the end of pandemic measures. Over 10 million people are expected to lose their insurance, and an additional 2 million are estimated to lose coverage by 2025.

From 2023 to 2032, healthcare spending is projected to grow by an average of 5.6% annually, outpacing the expected annual GDP growth rate of 4.3% over the same period.

This growth will result in healthcare spending accounting for 19.7% of GDP by 2032, up from 17.3% in 2022.

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