Home Health Spending Projected To Hit $141.5B In 2023, Accelerate Through 2031

The U.S. government is projected to accelerate its spending on home health services in 2023. Then, from 2025 to 2031, annual home health spending will grow at a rate faster than any other health care category.

That’s according to new estimates from the Office of the Actuary at the Centers for Medicare & Medicaid Services (CMS). The estimates were published Wednesday in Health Affairs.

The new projections are part of the Office of the Actuary’s regular efforts to better understand how Americans will spend their health care dollars in coming years.


Overall, national health spending grew by an estimated 4.3% in 2022, with expenditures hitting around $4.4 trillion. Over the next decade, health spending is expected to grow 5.4% per year, on average, according to CMS.

“Recent legislation is anticipated to affect trends in health insurance enrollment and health care spending over the next decade,” Sean Keehan, an economist with the Office of the Actuary at CMS, said in a statement. “Altogether, and consistent with its past trend, health spending for the next 10 years is expected to grow more rapidly, on average, than the overall economy.”

In 2022, national health expenditures on home health services were an estimated $131.5 billion, according to CMS. The estimates released Wednesday do not specify exactly which home health services make up this category.


By the end of 2023, the number is projected to reach $141.5 billion. By 2031, national health expenditures on home health services are estimated to reach $250.6 billion.

After staying relatively flat in 2021, the average annual growth in home health spending was an estimated 5.1% in 2022, according to CMS. Average annual growth is estimated to be 7.5% in 2023 and 5.5% in 2024 – and 7.7% from 2025 to 2031.

The next fastest-growing health care category during those later years is hospital care, where national expenditures are projected to grow at an average annual rate of 6.1%.

Total Medicare spending growth is projected to accelerate to 8% in 2023, with expenditures projected to exceed $1 trillion for the year. For the major payers, Medicare is expected to grow the fastest from 2022 to 2031, averaging 7.5% per year – with spending hitting an estimated $1.85 trillion by the end of that period.

Most of the growth in Medicare spending is attributable to America’s aging baby boomer population and an anticipated uptick in hospital spending.

Meanwhile, Medicaid spending is projected to total $834.4 billion in 2023, growing at a rate of 3.7%. From 2022 to 2031, Medicaid spending is estimated to grow at an average annual rate of 5.6% – reaching $1.2 trillion by the end of that period.

Medicaid spending is projected to decelerate in 2023 and 2024 with the end of COVID-19 pandemic enrollment flexibilities, but then pick back up. The expiration of pandemic provisions is expected to result in reductions to Medicaid enrollment through 2025, with enrollment falling to 81.1 million that year after reaching a peak of 90.4 million in 2022, according to CMS.

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