That’s the conclusion of the Centers for Medicare and Medicaid Services’ National Center for Health Expenditure Forecasts. The paper was published in health affairs—Expenditure changes are summarized below:
National health spending is projected to grow by an average of 5.4% over the 2022-31 period and will account for around 20% of the economy by the end of the period. The percentage of the population that is insured is expected to exceed 92% by 2023, driven in part by record-high Medicaid enrollment, and then decline to 90%. The prescription drug provision in the Reducing Inflation Act of 2022 is expected to reduce out-of-pocket costs for Medicare Part D enrollees starting in 2024 and provide savings to Medicare starting in 2031.
As the population ages, we see Medicare becoming a larger and larger percentage of the US enrollee. Note that the graph below includes only Medicare, Medicaid, and private insurance, and linearly interpolates these rates between 2024 and 2031.
Regarding the impact of the Inflation Reduction Act, the authors write:
A provision in the Lower Inflation Act, which is expected to put upward pressure on Medicare spending growth, is the expected payout that the program will pay to cover the $2,000 annual Part D out-of-pocket cap that will be paid by 2025. In effect, however, Medicare’s spending growth is expected to slow during the final years of the forecast period, reflecting the full effect of the provisions of the Reducing Inflation Act that allowed the plan to negotiate prices for certain Part D drugs, And compare drug price increases with the Consumer Price Index.
full article available here.
