Spending on Home Healthcare Projected to Grow Faster Than Other Category, Say CMS Actuaries

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In their annual projections of healthcare spending, the actuaries foresee spending on home healthcare growing at annual rate of 7.7% from 2025 to 2031, which is faster than annual growth of 5.6% for health expenditures overall.

The amount of money spent on post-acute care relative to the amounts spent on hospital care and payment for professional services (physician and dentists fees and so on) is relatively small. According to CMS actuaries, $1.34 trillion was spent on hospital care in 2021, which is more than ten times the $125.2 billion spent on home healthcare. The tab for home care, nursing care facilities and continuing care retirement communities combined was $306.5 billion in 2021, which is less than one-quarter of what was spent for hospital care and less than one-tenth of the $4.255 trillion spent on healthcare overall.

A report on projections of the country’s healthcare expenditures through 2031 by CMS actuaries that was published in this month’s issue of Health Affairs and posted online mid-June doesn’t dramatically change those proportions. But the actuaries see expenditures on home healthcare climbing faster than spending on any other category for which they made projections, including hospital care, professional services and prescription drugs.

Sean P. Keehan, M.S., is the lead author of CMS actuarial report on projected health expenditures that show spending on home healthcare growing faster than any other category, including spending on hospitals, professiona services and prescription drugs.

Sean P. Keehan, M.S., is the lead author of CMS actuarial report on projected health expenditures that show spending on home healthcare growing faster than any other category, including spending on hospitals, professiona services and prescription drugs.

Sean P. Keehan, M.A., the lead author and an economist in the Office of the Actuary at the Centers for Medicare and Medicaid Services, and colleagues, project that the expenditures for home healthcare will increased annually, on average, by 7.7% from 2025 to 2031, reaching 250.6 billion in 2031, which is double the expenditures in 2021.

During that same period, they project that health expenditures overall will grow annually at rate of 5.6%, reaching $7.174 trillion in 2031.

Meanwhile, spending on hospital care will grow annually by 6.1% during those year, spending on professional services by 5.6% and spending on prescription drugs by 4.8%.


Even with that fast rate of growth, home healthcare will remain a relatively small fraction of U.S. health expenditures, accounting for just 3.5% of the $7.174 trillion total spend, according to the CMS actuarial experts.

Spending on nursing care facilities and continuing care retirement communities, which the report groups in one category, will increase more modestly than the home healthcare spending, growing annually at rate of 4.6 % during the 2025-2031 period, according to Keehan and colleagues. In 2031, spending will reach $283.3 billion, or about $30 billion more than the projected 2031 spending on home healthcare.

Spending on home healthcare, nursing care facilities and continuing care retirement combined will total $533.9 billion in 2031, according to the projections, which is about $60 billion less than projected $591.8 billion expenditure on prescription drugs that year.

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