Out-of-Pocket Healthcare Expenses Spike For Americans in 2023

The amount that Americans pay out-of-pocket for healthcare grew by 10.5% in 2021, the highest year-over-year percent increase in nearly four decades, according to data released last week by the Centers for Medicare and Medicare Services.

The data was released as part of the CMS’s National Health Expenditures report.

Out-of-pocket expenses includes copays and deductibles for individuals with health insurance and everything else for those without it. The areas where out-of-pocket spending increased the most were in eyeglasses, dental services, and medical supplies.

Making the increase even more painful for Americans is that it comes on the heels of a 2.5% decline in out-of-pocket spending in 2020.

Of the $4.3 trillion that was spent on healthcare in 2021, 71% came from health insurance, 10% from out-of-pocket expenses, 10% from other third-party payers and programs, 5% from investment, and 4% from government public health activities.

Hospital care accounted for 31% of all healthcare spending in 2021, followed by physician and clinical services (20%), retail prescription drugs (9%), and other health, residential, and personal care services (5%).

The number of individuals without health insurance declined for the second year in a row, thanks to increased enrollment in Medicaid and private health insurance. About 8% of Americans — or 26 million people — do not have any form of health insurance.

Private employers expect that health care costs will rise by 6% in 2023.

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