U.S. Healthcare Spending Hits $4.9 Trillion in 2023

U.S. healthcare spending rose by 7.5% to $4.9 trillion in 2023, largely driven by increased usage of medical services and a rise in enrollment in private health plans, particularly under the Affordable Care Act (ACA). The Centers for Medicare and Medicaid Services (CMS) reported that healthcare spending growth outpaced U.S. economic growth, with spending on retail prescription drugs surging by 11.4%.

The report highlighted that prescription drug expenses, especially for diabetes medications like Ozempic and Wegovy, significantly contributed to the increase in Medicare spending, which grew by 12.2%. Overall, healthcare constituted 17.6% of the U.S. economy in 2023, marking a slight rise from the previous year. Enrollment in private health insurance rose by 1.6%, indicating a wider coverage of health insurance among Americans.

Commercial insurers accounted for the largest share of healthcare spending in 2023, a significant increase attributed to the American Rescue Plan and the Inflation Reduction Act, which provided enhanced subsidies to those enrolled in ACA plans such as Obamacare. Consequently, the number of individuals enrolled in these plans increased markedly, underscoring the ongoing expansion of health coverage in the United States.

CMS reported that 92.5% of Americans had some form of health insurance in 2023, signifying an increase from the previous year, reflecting the impact of policy changes and the ongoing demand for healthcare services as individuals seek greater access to medical care.