Medicare spending will grow by 8 percent in 2023, driven by higher hospital utilization and enrollment, CMS projects.
According to a report by CMS published in Health Affairs June 14, spending in the program grew by 4.8 percent in 2022, driven by lower use of hospital services.
The agency projects spending growth will slow slightly in 2024, to 7.2 percent, largely driven by lower per-enrollee payments. The agency expects overall prescription drug spending in the program to increase because of a provision of the Inflation Reduction Act that eliminates 5 percent coinsurance payments for catastrophic coverage.
Prescription drug costs will continue growing in 2025 at a rate of 12.4 percent, driven by Inflation Reduction Act copay caps. Prescription spending will slow after 2025, the agency predicts, as drug price negotiation provisions in the law take effect.
Medicare will have faster enrollment growth compared with private insurance, according to CMS, as the youngest baby boomers enroll in the program through 2029.
See the full report here.