Nursing Home, CCRC Spending To Reach $337B by 2032, as Insurance Enrollment Reaches New Heights

Expenditures for Nursing facilities and continuing care retirement communities (CCRCs) is expected to reach $237.6 billion in 2026, and $337.4 billion by 2032, according to data released Wednesday.

Nursing homes and CCRCs have been increasing steadily since 2021, states a report prepared by the Office of the Actuary (OACT) at the Centers for Medicare & Medicaid Services (CMS) and published in Health Affairs.

These care settings started at $181.1 billion in annual spending in 2021, with spending increasing by about $10 billion in 2022, then $18 billion in 2023. Spending is expected to reach $216.3 billion by the end of this year.


OACT’s study in 2022 projected nursing home and CCRC spending would reach $273 billion by 2030 and experience an increase in expenditures coming off of a drop in federal financial support from the pandemic.

Meanwhile, average annual growth in these sectors is anticipated to be 3.3% by the end of 2024, and then increase again in the 2025 to 2026 period by 4.8%. Between 2027 and 2032, nursing homes and CCRCs are expected to see average annual growth increase by 6%.

Health care spending growth overall is expected to outpace the gross domestic product (GDP) during the coming decade, according to the report. The health share of GDP may reach 19.7% by 2032, an increase from 17.3% in 2023. Expenditures reached $4.8 trillion in 2023.


Health care spending across all care settings, and between 2023 and 2032, is expected to grow 5.6% per year on average.

This jump in spending is attributed to an increase in the share of the insured population. About 93.1% of the population is likely to have health insurance by that time, with a record-high level of Medicaid enrollment in the future.

However, in 2024 Medicaid enrollment is expected to decline as states continue their eligibility redeterminations, perhaps impinging on the Medicaid enrollment trend in the near term. A greater number of redeterminations are following a moratorium that was put on Medicaid redeterminations during the pandemic.

The redetermination process has already been causing headaches for nursing homes, with an increasing number of residents being found ineligible for Medicaid coverage as a result.

To offset this Medicaid decline, private health insurance enrollment is projected to increase, according to the report, because of an extension of enhanced subsidies for direct-purchase health insurance under the Inflation Reduction Act of 2022. There will be a temporary special enrollment period for qualified people losing Medicaid coverage after eligibility redeterminations.

The study also found that Medicare has the highest projected 10-year average spending growth rate of all payers at 7.4%, compared to 5.6% for private health insurance, 5.2% for Medicaid and 4.7% for out-of-pocket expenditures.

Medicare’s average projected enrollment is estimated to have a growth rate of 2%, a reflection of enrollment by the baby boomer generation through 2029. This trend is assisted by CMS’ push for 100% of Medicare beneficiaries to be in a value-based arrangement by 2030.

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