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National Health Spending in 2022

By December 16, 2023Commentary

Another year rolls by and the actuaries at the Center for Medicare Services have released their annual analysis of health spending, this time for the year 2022.  Health spending took some twists and turns during the epidemic, with lots of CV-19 spending, but also a ton of missed care that reduced spending.  A factor in future year’s spending will be the deaths during the epidemic of many older people, who tend to have high health costs.  Year-over-year, spending rose 4.1% to an alarming $4.5 trillion, almost 20% of the economy and around $13,500 a person.  Health spending grew by a trillion dollars just in the five years since 2017.  That is money that could be more profitably spend elsewhere.     (HA Article)

Health spending would have been even higher, but health care inflation was comparatively muted, although like under-estimated.  We are now in the midst of a health care and health insurance inflation burst, which will drive prices and spending significantly higher.  Prices for government public health-related spending rose at a much faster rate than did prices for personal health care.  Medicaid and private insurance spending rose faster than Medicare spending, driven in large part by substantial enrollment growth, as 92% of people had some form of health insurance.  Medicaid spending is completely out of control and has to be reined in.  Social Security disability is also out of control and results in people being automatically eligible for Medicare.  Every single person on that disability program should be reviewed for ongoing eligibility.  It has become a refuge for people who simply don’t want to work.  The burden on households in terms of both direct expenditures and taxes to support government health program spending is staggering.

Federal government spending is a huge problem in general and health care is a major contributor to that problem.  Within the next couple of years there will be a signficant reckoning and doing something about Medicaid and Medicare will have to be part of that.

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