Home healthcare spending will surpass $250 billion by 2031, according to new estimates released in a study published in Health Affairs Wednesday from the Office of the Actuary (OACT) at the Centers for Medicare & Medicaid Services (CMS).
Projections also indicate that spending will hit $141.5 billion this year and $149.3 billion in 2024. From 2025 to 2031, CMS predicts that home health spending will increase at a rate of 7.7%.
As home health spending increases, so too will general healthcare spending, which CMS projects will reach $4.6 trillion in 2023 and balloon to nearly $7.2 trillion by 2031.
Healthcare spending is growing faster than other sectors, Sean Keehan, an economist in the OACT at CMS and the Health Affairs study’s first author noted.
“Recent legislation is anticipated to affect trends in health insurance enrollment and healthcare spending over the next decade,” he said in a statement. “Altogether, and consistent with its past trend, health spending for the next ten years is expected to grow more rapidly, on average, than the overall economy.”
CMS projects Medicare spending will rise from 4.8% in 2022 to 8% in 2023 with expenditures expected to exceed $1 trillion. By 2031, Medicare spending is predicted to exceed $1.8 trillion, expanding at a rate of 7.8% per year, the study said. The study also estimates that Medicare enrollment will reach 76.4 million by 2031, with overspending per enrollee hitting $24,000 that same year.
Medicaid spending, however, is slowing down after three years of over 9% growth during the COVID-19 pandemic. CMS projects that Medicaid spending will increase 3.7% in 2023 to $834.4 billion but then decrease by 2.1% to $816.7 billion in 2024.
CMS predicts that Medicaid enrollment will also decrease. After a historically high figure of 90.4 million enrollees in 2022, CMS expects enrollment to decline to 81.6 million in 2024.
