CMS is projecting a 7.7 percent increase in private health insurance spending in 2023, driven by an increase in utilization and rising prices of medical care.
According to a report from CMS published June 14 in Health Affairs, per enrollee spending is expected to rise by 6.8 percent in 2023.
Higher use of hospital services is the main driver behind the expected increase, according to the report.
Older adults are more comfortable accessing services as pandemic fears subside, Tim Noel, CEO of Medicare and retirement at UnitedHealthcare, said June 14 at the Goldman Sachs Global Healthcare Conference. The company is anticipating its medical cost ratio for the second quarter to be at the high end or exceed its full-year estimates.
CMS projects private health insurance costs to rise by 7.6 percent in 2024 and become more stable in 2025 through 2031. The average annual growth rate is expected to be 5.2 percent between 2025 and 2031.
The number of people enrolled in private health insurance is expected to increase by just 0.1 percent annually between 2025 and 2031, driven by the expiration of expanded subsidies for marketplace coverage in 2026, according to CMS' report.