Facts about NHE
Column
NHE 2023
Historical NHE, 2023
NHE grew 7.5% to $4.9 trillion in 2023, or $14,570 per person, and accounted for 17.6% of Gross Domestic Product (GDP).
Medicare spending grew 8.1% to $1,029.8 billion in 2023, or 21 percent of total NHE.
Medicaid spending grew 7.9% to $871.7 billion in 2023, or 18 percent of total NHE.
Private health insurance spending grew 11.5% to $1,464.6 billion in 2023, or 30 percent of total NHE.
Out of pocket spending grew 7.2% to $505.7 billion in 2023, or 10 percent of total NHE.
Other Third Party Payers and Programs and Public Health Activity spending declined 3.1% in 2023 to $563.4 billion, or 12 percent of total NHE.
Hospital expenditures grew 10.4% to $1,519.7 billion in 2023, faster than the 3.2% growth in 2022.
Physician and clinical services expenditures grew 7.4% to $978.0 billion in 2023, faster growth than the 4.6% in 2022.
Prescription drug spending increased 11.4% to $449.7 billion in 2023, faster than the 7.8% growth in 2022.
The largest shares of total health spending were sponsored by the federal government (32 percent) and the households (27 percent). The private business share of health spending accounted for 18 percent of total health care spending, state and local governments accounted for 16 percent, and other private revenues accounted for 7 percent.
Projected NHE
Projected NHE, 2023-2032
Over 2023-32 average NHE growth (5.6%) is projected to outpace that of average GDP growth (4.3%), resulting in an increase in the health spending share of GDP from 17.3 percent in 2022 to 19.7 percent in 2032.
NHE spending is expected to have grown 7.5% in 2023, faster than GDP growth of 6.1%.
Reflects broad increases in the use of care associated with the insured share of the population of 93.1% - an unprecedented high.
Largely related to a record-high level of Medicaid enrollment (91.2M) in 2023, as well as gains in direct-purchase enrollment (8.3M) over 2023-25.
Health price growth remains modest, though faster than pre-pandemic.
By 2032 the insured share falls to 90.7%.
Consistent with the President’s Budget, Medicaid enrollment is projected to decline to 81.0M in 2024 and slightly further to 79.4M by 2025 following the expiration of the continuous enrollment requirement.
Direct-purchase enrollment is expected to decline by 7.3M in 2026 (-19.2%) due to expiration of the IRA’s temporary extension of enhanced subsidies and associated temporary Special Enrollment Period (SEP).
Over 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.
IRA impact
Inflation Reduction Act (IRA) Impacts on NHE
Initially, upward pressure on Medicare “retail” prescription drug spending is expected as a result of the IRA’s Part D benefit restructuring ($2,000 cap on out-of-pocket spending on Part D; rebates shift from program to point of sale when drug negotiations begin).
Conversely, downward pressure on Medicare spending is expected associated with (manufacturer discounts for the low-income population (starting in 2025) and IRA provisions that are associated with drug price negotiations and the linking of price increases to the Consumer Price Index (CPI).
Beginning in 2028, spending growth rates for Medicare outpatient hospital and physician and clinical services are expected to be lower than they otherwise would have been, mainly because the IRA’s drug negotiation provision will begin to apply to Medicare Part B drugs.
The NHE projections show lower out-of-pocket spending associated with the IRA due to more generous Medicare Part D benefits reflecting the elimination of the 5% coinsurance for catastrophic coverage in 2024, the implementation of a $2,000 cap on out-of-pocket spending on Part D drugs in 2025, and the applicability of drug price negotiations beginning in 2026. |
Expenditures
Column
Population
NHE
NHE/GDP
NHE per capita
Type
Uninsured and ACA
Column
In 2010 the ACA was enacted. At that time, there were 48.1 million
uninsured.
In 2023 the number of uninsured was 24.9 million; the
number of people insured in Marketplace 16.2 million.
Insurance
Column
Medicare/Medicaid Spending
Medicare/Medicaid Enrollments
Private insurance
Medicare by states
Notes
NOTES
Data is from https://www.cms.gov/data-research/statistics-trends-and-reports/national-health-expenditure-data/historical. Relevant Excel files are in NHE Tables (Zip).
Affordable Care Act
The comprehensive health care reform law enacted in March 2010 (aka ACA, PPACA, or “Obamacare”).
For the goals of the law, see https://www.healthcare.gov/glossary/affordable-care-act/
For protections provided by the law, see ACA protections
Medicaid coverage and the 2021 American Rescue Plan
Act
(This section is taken from KFF)
Under the Affordable Care Act (ACA), Medicaid coverage is extended to nearly all nonelderly adults with incomes at or below 138% of the federal poverty level (FPL) (about $23,556 for a family of three in 2022) in the 42 states (including DC) that opted to expand as of March 2023.
Under rules in place before the ACA, all states extend public coverage to poor and low-income children, with a median income eligibility level of 255% of poverty in 2022.
The ACA also established health insurance marketplaces where individuals can purchase insurance and allowed for federal tax credits for such coverage for people with incomes from 100% to 400% FPL (about $23,030 to $92,120 for a family of three in 2022).
The American Rescue Plan Act (ARPA) of 2021 temporarily expanded eligibility for tax credits to people with incomes above 400% FPL for 2021 and 2022. Tax credits are generally only available to people who are not eligible for other coverage.
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