America's Benefit Specialist August/September 2023

NOTEWORTHY

tion and rising labor costs) are expected to lead to faster hospital spending growth of 9.3%. For 2025-2031, hospital spending trends are expected to normalize (with projected average annual growth of 6.1%) as there is a transition away from pandemic public health emergency funding impacts on spending. Overview of Physician and Clinical Services Trend s: Growth in physician and clinical services spending is projected to average 5.3% over 2022-2031. An expected deceleration in growth in 2022, to 2.4% from 5.6% in 2021, reflects slowing growth in the use of services following the pandemic-driven rebound in use in 2021. For 2025-2031, av erage spending growth for physician and clinical services is projected to be 5.7%, with an expectation that average Medicare spending growth (8.1%) for these services will exceed that of average private health insurance growth (4.6%) partly as a result of comparatively faster growth in Medicare enrollment. The Office of the Actuary’s 2022-2031 projections will be published at: www.cms.gov/Research-Statistics-Da ta-and-Systems/Statistics-Trends-and-Reports/NationalHeal thExpendData/NationalHealthAccountsProjected.html. DENTAL PLAN SATISFACTION RISING AS COMMUNICATIONS AND PLAN COVERAGE INCREASE Overall customer satisfaction with dental plans is up 18 points (on a 1,000-point scale) from a year ago, according to the J.D. Power 2023 U.S. Dental Plan Satisfaction Study. The study shows that dental plan providers must implement strong communication strategies to showcase plan value and in crease customer satisfaction. “Last year, the results of this study showed us that dental plans must increase communication strategies to showcase plan value to increase customer satisfaction,” said Christo pher Lis, managing director of global healthcare intelligence at J.D. Power. “Findings from this year’s study show that den tal plans took note as communication and coverage factors had the largest weighted year-over-year increases. Customers want to make sure they know their deductibles and coverage benefits—with full transparency on out-of-pocket costs. The efforts of health plans like Aetna and Humana to inform and educate insureds have not gone unnoticed and are reflected in their higher overall satisfaction scores.” Aetna Dental ranks highest in overall customer satisfaction with a score of 816. Humana Dental (809) ranks second and United Concordia Dental (796) ranks third. The 2023 U.S. Dental Plan Satisfaction Study measures customer satisfaction with dental plan providers based on five factors, in order of importance: cost, plan coverage, communication, customer service, and claims and reim bursement. The study is based on responses from 1,411 dental plan members and was fielded in March and April. For more information, visit www.jdpower.com/business/healthcare/ us-dental-plan-satisfaction-study.

on the growth rates for total out-of-pocket spending for prescription drugs, which are projected to decline by 5.9% in 2024, 4.2% in 2025 and 0.2% in 2026. Medicare : Average annual expenditure growth of 7.5% is projected for Medicare over 2022-2031. In 2022, the combi nation of fee-for-service beneficiaries utilizing emergent hospital care at lower rates and the reinstatement of payment rate cuts associated with the Medicare Sequester Relief Act of 2022 resulted in slower Medicare spending growth of 4.8% (down from 8.4% in 2021). In 2025, Medicare spending is projected to grow 8.9%, reflecting the effect of the IRA’s cap ($2,000 in 2025) on out-of-pocket spending for Part D enrollees and the associated shift in responsi bility for those payments that exceed the cap from the beneficiaries to the program. Projected Medicare spending growth slows to 6.8% in 2030 and 2031, associated with the IRA’s provisions related to drug price negotiations and in flation rebates, as well as slower enrollment growth as the last of the demographic cohort known as the baby boomer generation (those born between 1946-1964) enrolls in 2029. Medicaid : On average, over 2022-2031, Medicaid expendi tures are projected to grow by 5.0%. With the end of the continuous enrollment condition in 2023, Medicaid enroll ment is projected to decline over 2023-2025, with most of the net loss in enrollment (8 million) occurring in 2024 as states resume annual Medicaid redeterminations. Med icaid enrollment is expected to increase and average less than 1% through 2031, with average expenditure growth of 5.6% over 2025-2031. Private Health Insurance : Over 2022-2031, private health insurance spending growth is projected to average 5.4%. Despite faster growth in private health insurance enroll ment in 2022 (led by increases in Marketplace enrollment related to the American Rescue Plan Act’s subsidies), pri vate health insurance expenditures are expected to have risen 3.0% (compared to 5.8% in 2021) due to lower utiliza tion growth, especially for hospital services. Faster project ed growth in utilization and healthcare prices in 2023 leads to a 7.7% increase in private health insurance spending. In 2026, private health insurance spending is expected to be impacted by the expiration of enhanced subsidies for Mar ketplace plans and the associated 10% decline for those enrolled in directly purchased insurance that year. Selected highlights in NHE for the three largest goods and services categories include: Overview of Hospital Trends : Over 2022-2031, hospital spending growth is expected to average 5.8% annually. In 2022, hospital spending is projected to have increased 0.8%, reflecting declines in PHI and out-of-pocket spend ing and low growth for Medicare, as growth in the use of hospital services slowed from higher rates in 2021. In 2023, faster growth in hospital utilization rates and accelerating growth in hospital prices (related to economywide infla

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