Health care spending in the US topped $4 trillion in 2020, CMS says
Health care spending in the United States increased 9.7% from 2019, reaching $4.1 trillion in 2020, or $12,530 per person, according to CMS.
“To give a sense of the magnitude of this funding, if we exclude spending for other federal programs and federal public health expenditures, the increase in total national health care spending would be just 1.9% in 2020, as compared to the 9.7% when it is included,” Micah Hartman, a statistician in CMS’s Office of the Actuary, said during a virtual press conference.
Hartman continued, “this is not to say what health care spending would have been without the COVID 19 pandemic, but rather to remove the additional or supplemental COVID funding to give you a sense of the impact and what it had on the overall growth in 2020.”
CMS data also indicated that in 2020, health care spending made up 19.7% of the U.S. GDP, and national health spending per capita rose 9.3%. Those numbers are up from 17.6% and 3.8%, respectively, in 2019.
There was a 36% increase in federal health care spending in 2020 largely due to assistance programs such as the Provider Relief Fund and the Paycheck Protection Program, which were meant to make up for lost revenue and increased costs during the COVID-19 pandemic. There were also increases in federal public health spending, increases in federal Medicaid payments because of faster enrollment growth, and a 6.2 percentage point increase in federal medical assistance during the pandemic, according to Hartman.
While the number of uninsured individuals fell from 31.8 million in 2019 to 31.2 million in 2020, “there were significant shifts in types of coverage, as 2.3 million fewer people were covered through employer-sponsored insurance, Hartman said. Conversely, there was a 0.6 million increase in Marketplace enrollment, and Medicaid enrollment grew 3.7 million in 2020, or 5.1% — the largest growth since 2015. Medicare enrollment growth slowed in 2020 to 2.1 percent compared with 2.6 percent in 2019,” he added.
Hartman co-authored a report in Health Affairs that predicted that health care spending in 2021 will almost certainly reflect “the emergence of the delta variant in the summer of 2021, including the variant’s influence on cases and hospitalizations.”
The report also said that “uncertainty remains regarding how the pandemic may evolve during the winter months (given the emergence of the omicron variant in late fall 2021), whether the pandemic plays a significant role in 2022 and beyond and whether there are other factors that might affect future health care consumption decisions.”
National Health Spending Growth Increased 9.7% in 2020 Because of Federal Pandemic Expenditure. https://www.cms.gov/newsroom/press-releases/national-health-spending-2020-increases-due-impact-covid-19-pandemic. Published Dec. 15, 2021. Accessed Dec. 15, 2021.