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U.S. Healthcare Spending in 2022: Key Highlights and Trends

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In 2022, U.S. healthcare spending increased by 4.1% to reach $4.5 trillion, faster than 2021’s 3.2% growth but slower than the 10.6% in 2020. The rise was driven by Medicaid and private health insurance spending, partially offset by reduced federal COVID-19 funding. The insured population hit a record 92% in 2022, with 2.9 million more on private insurance and 6.1 million on Medicaid. The number of uninsured individuals dropped from 28.5 million in 2021 to 26.6 million in 2022.

GDP grew by 9.1% in 2022, and healthcare’s share dropped to 17.3%, down from 18.2% in 2021 and 19.5% in 2020. The average from 2016-2019 was 17.5%. Federal COVID-19 funding decreased from $174.6 billion in 2020 to $2.0 billion in 2022, impacting healthcare spending.

2022 Healthcare Spending Trends by Service and Product Categories

In 2022, healthcare spending by service or product type showed the following trends:

Hospital Care (30% share): Spending increased by 2.2% to $1.4 trillion, slower than 2021’s 4.5% growth. This was due to reduced spending by private health insurance, Medicare, Medicaid, and other private revenues. Lower hospital prices and fewer hospital days and discharges contributed to the slowdown.

Physician and Clinical Services (20% share): Spending grew 2.7% to $884.9 billion in 2022, slower than the 5.3% growth in 2021. Major payers, including Medicare, Medicaid, private health insurance, and out-of-pocket, saw slower growth due to decreased service utilization and physician prices.

Retail Prescription Drugs (9% share): Spending increased by 8.4% to $405.9 billion, faster than 2021’s 6.8% growth. Medicare and out-of-pocket spending rose, while Medicaid and private health insurance growth slowed. Increased prescriptions and rising drug prices contributed to the growth.

Other Health, Residential, and Personal Care Services (6% share): Spending grew by 9.7% to $246.5 billion, accelerating from 6.7% in 2021. This was mainly due to increased spending on Medicaid home and community-based waivers.

Nursing Care Facilities and Continuing Care Retirement Communities (4% share): Spending increased by 5.6% to $191.3 billion in 2022 after a decline of 7.8% in 2021. Medicaid, out-of-pocket, and Medicare contributed to the growth.

Dental Services (4% share): Spending grew by 0.3% to $165.3 billion in 2022, slower than 2021’s 18.2% growth. This was driven by slower growth across major payers and reduced federal funding.

Home Health Care (3% share): Spending increased by 6.0% to $132.9 billion in 2022, accelerating from 0.3% growth in 2021. Private health insurance, out-of-pocket, and Medicaid spending contributed to the growth.

Other Professional Services (3% share): Spending reached $140.6 billion in 2022, growing by 5.1%, slower than 2021’s 13.2% growth. The slowdown was due to slower growth in Medicare, private health insurance, out-of-pocket spending, and reduced COVID relief funding.

Other Non-durable Medical Products (3% share): Retail spending increased by 8.5% to $115.4 billion in 2022, slower than 2021’s 12.3% growth. Out-of-pocket spending dominated this category.

Durable Medical Equipment (2% share): Retail spending increased by 5.1% to $67.1 billion in 2022, slower than the 18.6% growth in 2021. The slowdown was driven by slower growth in out-of-pocket and private health insurance spending.

Healthcare Spending

2022 Healthcare Funding Sources: An Overview of Key Trends

In 2022, health spending sources showed these trends:

Private Health Insurance (29% share): Grew 5.9% to $1.3 trillion, slightly slower than 2021’s 6.3% increase. Enrollment rose by 1.5% or 2.9 million individuals.

Medicare (21% share): Increased 5.9% to $944.3 billion, down from 7.2% in 2021. Fee-for-service spending declined by 1.9%, while private plan spending rose by 15.1%. Total enrollment grew by 1.9%.

Medicaid (18% share): Rose 9.6% to $805.7 billion, marking the third year of 9%+ growth. Enrollment increased by 7.2%.

Out-of-Pocket (11% share): Grew 6.6% to $471.4 billion, slowing from 11% in 2021. Mainly affected by dental services, durable medical equipment, and physician and clinical services.

In 2022, national healthcare spending sources:

  • Federal government: 33%
  • Households: 28%
  • Private businesses: 18%
  • State and local governments: 15%
  • Other private revenues: 6%

Federal healthcare spending grew 1.0%, with Medicaid up 10.8%, due to enrollment and COVID-19 relief. Households saw 6.9% growth, driven by Medicare costs and private insurance premiums. State and local government spending increased 6.5%, led by Medicaid. Private business spending rose 6.0%, mainly in private insurance premiums, which grew 5.9%.


Resource: Centers for Medicare & Medicaid Services, December 13, 2023

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