National health spending reached $4.5 trillion in 2022, or $13,493 per person, according to an analysis from the Office of the Actuary at the Centers for Medicare & Medicaid Services published Wednesday afternoon. That’s a year-over-year increase of 4.1%, which was slower than growth in the nominal gross domestic product, which increased 9.1% during the same time period, the authors noted.

Spending for services provided at freestanding nursing homes and continuing care retirement communities, which represented 4% of overall spending, increased by 5.6% in 2022, to $191.3 billion, after reporting a 7.8% dip in spending in 2021.

“Nursing homes consist of a lot of Medicare and Medicaid spending, and we saw a decline in Medicare spending in 2021,” CMS Economist Ann Martin, a co-author of the report, said Wednesday during a press briefing held in conjunction with the release of the analysis. “Also, what’s really driving that dip in 2021 overall is the decline in other third-party payers and programs.”

The Medicaid program, out-of-pocket payments and Medicare reimbursements accounted for more than three-fourths of total payments to nursing homes and CCRCs and, in 2022, spending for those payers had strong growth following low growth or reduced spending in 2021.

Martin noted that nursing homes also received much pandemic relief in 2020 supplemental federal funding, which declined from $22 billion in 2020 to approximately $3 billion in 2021.

Most of the decline in nursing homes spending stems from that loss, she said.

Spending for services provided by freestanding home healthcare agencies increased 6% in 2022 to $132.9 billion, accelerating from growth of 0.3% in 2021, according to CMS. Private health insurance, out-of-pocket, and Medicaid home health spending contributed to the faster growth, whereas Medicare spending growth for home healthcare services slowed. Home healthcare-related spending represented 3% of overall spending.

Overall spending growth similar to pre-pandemic levels

“The [overall] 4.1% growth in 2022 was similar to the pre-pandemic average annual growth of 4.4% over the 2016 to 2019 period,” Micah Hartman, chief statistician at the CMS Office of the Actuary and lead author of the report, said during the press briefing. “The share of the economy devoted to health was 17.3%, lower for the second year in a row and down from the peak of 19.5% in 2020.”

He added that the 17.3% figure 2022 was more in line with the average from 2016 to 2019 of 17.5%.

Medicaid and private health insurance spending influenced the overall  growth in healthcare spending in 2022. 

“Medicaid spending increased 9.6% in 2022 after growth of 9.4% in 2021 and 9.3% in 2020,” the authors noted.

In 2022, total spending for private health insurance reached $1.3 trillion, which was approximately $71 billion, or 5.9% more than the amount spent in 2021, according to Martin.

“Private health insurance enrollment grew 1.5% in 2022, and this was the fastest growth in enrollment since 2015 and reflected increased enrollment in both marketplace plans and employer-sponsored insurance,” Martin said. “On a per-enrollee basis, spending for private health insurance increased 4.3% which was slower than the growth of 5.9% in 2021.”

She said the slower growth was due primarily to slower growth in per-enrollee spending for employer-sponsored private health insurance. 

According to Martin, Medicaid spending reached $805.7 billion in 2022, an increase of 9.6%. 

“This was approximately the same rate of growth as experienced in 2020 and 2021, and the third consecutive year of growth above 9%,” she added.