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Short-term trends will be influenced by diminished severity of the COVID-19 pandemic and the end of massive federal support for the healthcare system during the public health emergency, the actuaries wrote. Similarly, related economic conditions drove a large increase in Medicaid enrollments, which states are winding down. Over time, policy changes such as Inflation Reduction Act of 2022 provisions targeting prescription drug costs will tend to constrain spending while others, such as enhanced health insurance exchange subsidies, will tend to increase expenditures, according to the Office of the Actuary.
Hospital spending is projected to increase an average of 5.8% annually during the 10-year period, compared to 5.3% for physician and clinical services and 4.6% for prescription drugs, the actuaries project. In 2031, hospital spending will reach $2.34 trillion dollars, according to the report.
The private sector, comprising businesses and households, will pay for 51% of health expenditures in 2031, slightly less than the current share, while the government will finance the remainder. Health insurance companies will spend $2.06 trillion on healthcare in 2031, compared with $1.85 trillion by Medicare and $1.2 trillion by Medicaid, the actuaries predict.
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