US Annual Health Care Expenditures Show Signs of Post-Pandemic Normalization

The nation’s annual health care spend reached $4.5 trillion in 2022, a 4.15 increase, compared to 3.1% the prior year.

The percentages may indicate a step towards normalization after the pandemic years. In 2020, the growth rate was 10.6%, according to a report published in Health Affairs. The report did not contain hospice-specific data.

“In 2022, strong Medicaid and private health insurance spending growth, including a turnaround in the net cost of insurance, was somewhat offset by continued declines in federal spending associated with the COVID-19 pandemic,” the report indicated.


The proportion of health care spending relative to the overall economy was 17.3%, also down from 2020’s rate of 19.5%. Again, the data indicates movement towards normalization. From 2016 through 2019, the average share was 17.5%.

Spending by Medicare, hospice’s principal payer, accounted for 21% of the total national expenditures, hitting $944.3 billion in 2022. Growth in Medicare spending also dropped to 5.9% in 2022, down from 7.2% the prior year.

Economic patterns also reflect the growing presence of Medicare Advantage. Fee-for-service expenditures dropped 1.9% last year after a 3.8% increase in 2021. But Medicare Advantage spending grew at a rate of 15.1% in 2022. In 2021, the growth rate was 11.5%.


As of last year, 92% of the U.S. population was insured, a “historic high,” the report indicated.

The rate of medical inflation was lower than that for the economy at large in 2022. The Gross Domestic Product price index rose 7.1% last year, after seeing 4.6% growth in 2021. But medical price inflation rose by only 3.2% in 2022.

“Inflation in the medical sector might not follow the patterns of the overall economy, as prices for some goods and services that are predominantly paid for by insurance (such as Medicare, Medicaid, and private health insurance) tend to be set in advance through legislation, regulation, or contractual agreements,” the report indicated.

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