By 2031, spending on nursing care facilities and continuing care retirement communities is projected to reach $283.3 billion by 2031.
That would be an increase from projected spending of $193.6 billion in 2022.
The projection comes from Health Affairs, which released a new research report that found national health expenditures overall are projected to grow 5.4%, on average, each year through 2031 and will account for roughly 20% of the economy by the end of that period.
Nursing care facility and CCRC spending is projected to have average annual growth of 6.8% in 2022, then dip, with growth of 4.6% in the 2025 to 2031 time period.
“The insured share of the population is anticipated to exceed 92 percent through 2023, in part as a result of record-high Medicaid enrollment, and then decline toward 90 percent as coverage requirements related to the COVID-19 public health emergency expire,” researchers wrote.
Prescription drug provisions of the Inflation Reduction Act of 2022 are anticipated to lower out-of-pocket spending for Medicare Part D enrollees beginning in 2024 and to result in savings to Medicare beginning in 2031.
Researchers also noted that since the expiration of the skilled nursing facility (SNF) 3-day stay rule waiver in May 2023, which waived the three-day inpatient stay requirement to receive SNF services and increased SNF spending, and the expiration of the 20%increase in payments to hospitals for inpatient admissions related to COVID-19, Medicare spending growth is projected to moderate somewhat to 7.2%in 2024.
By way of comparison, Medicare spending grew 8.4% in 2021.
“This largely reflects slower growth in Medicare Advantage per enrollee payments, in addition to slower fee-for-service hospital spending growth as a result of lower volume and intensity growth and more modest fee-for-service price updates,” researchers wrote.
Meanwhile, Medicaid spending is projected to have totaled $804.7 billion in 2022, representing 9.6% growth compared with 9.2% growth in 2021. This increased spending came in part from an increase in nursing home spending, which rose from 1.4% in 2021 to 5.1% in 2022. Researchers noted that utilization of nursing homes and home health increased as the effects of the pandemic waned.
