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COVID-19 Deaths Cut 2020 Medicare Enrollment Growth

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What You Need to Know

  • CMS actuaries say overall health care spending increased 9.7%.
  • Federal government health care spending climbed 36%.
  • Total national health care spending increased to $4.1 trillion, from $3.8 trillion.

Health expenditures made up nearly a fifth of the U.S. economy in 2020, a 2 percentage-point increase in the share they made up in 2019, due to the economic and health effects of the COVID-19 pandemic.

Overall Medicare enrollment increased only 2.1% in 2020, down from a projected growth rate of 2.7%, partly because COVID-19 killed so many Americans ages 65 and older.

Micah Hartman and other analysts at the Centers for Medicare and Medicaid Services Office of the Actuary touched on the effects of the pandemic on Medicare enrollment in a new reporting on national health care spending in 2020.

Total U.S. health expenditures increased to $4.1 trillion in 2020, from $3.8 trillion in 2019.

U.S. gross domestic product fell 2.2% over that period, to $21 trillion, or $63,482 per person.

Because of the sharp increase in health expenditures, and the decrease in GDP, the share of GDP tied to health spending increased to 19.7% in 2020, from 17.6% the year before.

Federal government spending on health care increased 36%, to $1.5 trillion, but, because of the increase in federal spending, and because COVID-19 reduced the use of routine health care in 2020, private health insurers’ spending fell 1.2%, to $1.15 trillion.

A Year Unlike Any Other

CMS has posted the 2020 National Health Expenditure Accounts spreadsheets, which are in the public domain, on its website.

The actuaries have also published a paper interpreting the data behind a paywall, in an academic journal, Health Affairs.

The actuaries repeatedly emphasize in the paper how much the pandemic has changed everything.

“The year 2020 was unlike any other in recent memory, as the COVID-19 pandemic swept across the world and disrupted nearly every aspect of normal life,” the actuaries write.

Enrollment and Coverage Expenditure Numbers

One thing the actuaries put in the detailed spreadsheets on the CMS website is official information about enrollment and spending for Medicare supplement (Medigap) insurance policies and Affordable Care Act exchange plan coverage.

The number of people with Medigap insurance coverage increased to 12.5 million, from 12.3 million, and spending on Medigap coverage increased to $34.4 billion, from $33.5 billion.

The average amount of Medigap spending per insured increased to $2,757, from $2,726.

In the ACA exchange plan market, the number of enrollees increased to 10.4 million, from 9.8 million, and exchange plan spending increased to $71.5 billion, from $69.6 billion.

The average amount of spending per exchange plan enrollee fell to $6,870, from $7,095.

The 2020 per-enrollee spending on exchange plan coverage compares with average spending of $5,862 per enrollee for employer-sponsored private health coverage; $8,836 per Medicaid enrollee; and $13,490 per Medicare enrollee.

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