National Health Expenditure (NHE) Fact Sheet

Historical NHE, 2023:

• NHE grew 7.5% to $4.9 trillion in 2023, or $14,570 per person, and accounted for 17.6% of Gross Domestic Product (GDP).
• Medicare spending grew 8.1% to $1,029.8 billion in 2023, or 21 percent of total NHE.
• Medicaid spending grew 7.9% to $871.7 billion in 2023, or 18 percent of total NHE.
• Private health insurance spending grew 11.5% to $1,464.6 billion in 2023, or 30 percent of total NHE.
• Out of pocket spending grew 7.2% to $505.7 billion in 2023, or 10 percent of total NHE.
• Other Third Party Payers and Programs and Public Health Activity spending declined 3.1% in 2023 to $563.4 billion, or 12 percent of total NHE.
• Hospital expenditures grew 10.4% to $1,519.7 billion in 2023, faster than the 3.2% growth in 2022.
• Physician and clinical services expenditures grew 7.4% to $978.0 billion in 2023, faster growth than the 4.6% in 2022.
• Prescription drug spending increased 11.4% to $449.7 billion in 2023, faster than the 7.8% growth in 2022.
• The largest shares of total health spending were sponsored by the federal government (32 percent) and the households (27 percent).   The private business share of health spending accounted for 18 percent of total health care spending, state and local governments accounted for 16 percent, and other private revenues accounted for 7 percent.

For further detail see NHE Tables in downloads below.

Projected NHE, 2023-2032:

• Over 2023-32 average NHE growth (5.6%) is projected to outpace that of average GDP growth (4.3%), resulting in an increase in the health spending share of GDP from 17.3 percent in 2022 to 19.7 percent in 2032. 
• NHE spending is expected to have grown 7.5% in 2023, faster than GDP growth of 6.1%.
• Reflects broad increases in the use of care associated with the insured share of the population of 93.1% - an unprecedented high.
• Largely related to a record-high level of Medicaid enrollment (91.2M) in 2023, as well as gains in direct-purchase enrollment (8.3M) over 2023-25.
• Health price growth remains modest, though faster than pre-pandemic.  
• By 2032 the insured share falls to 90.7%.
• Consistent with the President’s Budget, Medicaid enrollment is projected to decline to 81.0M in 2024 and slightly further to 79.4M by 2025 following the expiration of the continuous enrollment requirement. 
• Direct-purchase enrollment is expected to decline by 7.3M in 2026 (-19.2%) due to expiration of the IRA’s temporary extension of enhanced subsidies and associated temporary Special Enrollment Period (SEP).
• Over 2027-32, personal health care price inflation and growth in the use of health care services and goods contribute to projected health spending that grows at a faster rate than the rest of the economy.
• Inflation Reduction Act (IRA) Impacts on NHE:
  • Initially, upward pressure on Medicare “retail” prescription drug spending is expected as a result of the IRA’s Part D benefit restructuring ($2,000 cap on out-of-pocket spending on Part D; rebates shift from program to point of sale when drug negotiations begin). 
  • Conversely, downward pressure on Medicare spending is expected associated with (manufacturer discounts for the low-income population (starting in 2025) and IRA provisions that are associated with drug price negotiations and the linking of price increases to the Consumer Price Index (CPI). 
  • Beginning in 2028, spending growth rates for Medicare outpatient hospital and physician and clinical services are expected to be lower than they otherwise would have been, mainly because the IRA’s drug negotiation provision will begin to apply to Medicare Part B drugs.
  • The NHE projections show lower out-of-pocket spending associated with the IRA due to more generous Medicare Part D benefits reflecting the elimination of the 5% coinsurance for catastrophic coverage in 2024, the implementation of a $2,000 cap on out-of-pocket spending on Part D drugs in 2025, and the applicability of drug price negotiations beginning in 2026.

For further detail see NHE projections 2023-2032 in downloads below.

NHE by Age Group and Sex, Selected Years 2002, 2004, 2006, 2008, 2010, 2012, 2014, 2016, 2018, and 2020:

• Per person personal health care spending for the 65 and older population was $22,356 in 2020, over 5 times higher than spending per child ($4,217) and almost 2.5 times the spending per working-age person ($9,154).
• In 2020, children accounted for approximately 23 percent of the population and about 10 percent of all PHC spending.
• The working-age group comprised the majority of spending and population in 2014, 53 percent and over 60 percent respectively.
• Older Adults (aged 65 and older) were the smallest population group, about 17 percent of the population, and accounted for approximately 37 percent of all spending in 2020.
• Per person spending for females ($10,887) was 14 percent more than males ($9,554) in 2020.
• In 2020, per person spending for male children (0-18) was 10 percent more than females.  However, for working age adults per person spending for females was 20 percent more than for males.  For older adults, spending for males was 2 percent more than for females.

For further detail see health expenditures by age in downloads below.

NHE by State of Residence, 1991-2020:

• In 2020, per capita personal health care spending ranged from $7,522 in Utah to $14,007 in New York.   Per capita spending in New York state was 37 percent higher than the national average ($10,191) while spending in Utah was about 26 percent lower.  
• Health care spending by region continued to exhibit considerable variation. In 2020, the New England and Mideast regions had the highest levels of total per capita personal health care spending ($12,728 and $12,577, respectively), or 25 and 23 percent higher than the national average.   In contrast, the Rocky Mountain and Southwest regions had the lowest levels of total personal health care spending per capita ($8,497 and $8,587, respectively) with average spending 17 and 16 percent lower than the national average, respectively.
• Between 2014 and 2020, average growth in per capita personal health care spending was highest in New York at 6.1 percent per year and lowest in Wisconsin at 3.0 percent per year (compared with average growth of 4.3 percent nationally).
• The spread between the highest and the lowest per capita personal health spending across the states has remained relatively stable over 2014-20. Accordingly, the highest per capita spending levels were 90 to 100 percent higher per year than the lowest per capita spending levels during the period.
• Medicare expenditures per beneficiary were highest in Florida ($13,652) and lowest in Vermont ($8,726) in 2020.
• Medicaid expenditures per enrollee were highest in North Dakota ($12,314) and lowest in Georgia ($4,754) in 2020.

For further detail, see health expenditures by state of residence in downloads below.

NHE by State of Provider, 1980-2020:

• Between 2014 and 2020, U.S. personal health care spending grew, on average, 4.8 percent per year, with spending in Arizona growing the fastest (6.6 percent) and spending in Vermont growing the slowest (2.7 percent).
• In 2020, California’s personal health care spending was highest in the nation ($410.9 billion), representing 12.2 percent of total U.S. personal health care spending. Comparing historical state rankings through 2020, California consistently had the highest level of total personal health care spending, together with the highest total population in the nation. Other large states, New York, Texas, Florida, and Pennsylvania, also were among the states with the highest total personal health care spending.
• Wyoming’s personal health care spending was lowest in the nation (as has been the case historically), representing just 0.1 percent of total U.S. personal health care spending in 2020. Vermont, North Dakota, Alaska, and Montana were also among the states with the lowest personal health care spending in both 2020 and historically. All these states have smaller populations.
• Gross Domestic Product (GDP) by state measures the value of goods and services produced in each state. Health spending as a share of a state’s GDP shows the importance of the health care sector in a state’s economy. As a share of GDP, West Virginia ranked the highest (28.7 percent) and Washington state the lowest (11.7 percent) in 2020.  

For further detail, see health expenditures by state of provider in downloads below.