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OCA baseline report: California health spending rose 8.2% from 2022 to 2023; insurers' administrative costs flagged as large growth driver
Summary
The Office of Health Care Affordability reported statewide total health care expenditures rose from $377.6 billion in 2022 to $408.6 billion in 2023, an 8.2% increase, and highlighted a sharp rise in commercial insurer administrative costs and profits that staff and outside groups said needs further scrutiny.
The Office of Health Care Affordability (OCA) released a baseline report showing California total health care expenditures (THCE) rose from $377,600,000,000 in 2022 to $408,600,000,000 in 2023, an increase of $31 billion (8.2%). Deputy Director Vishal Pagani reported THCE per capita rose from $9,676 in 2022 to $10,847 in 2023, an 8.4% increase.
Why it matters: OCA said the findings help establish a statewide baseline for monitoring health spending and for the Board’s affordability mandate. The report also highlighted that insurer administrative costs and profits—particularly in the commercial market—grew sharply and are a material contributor to recent spending increases, a trend hospital and consumer advocates urged OCA to investigate further.
Key numbers and trends: OCA’s staff reported market‑level changes between 2022 and 2023: commercial spending grew 5.8%, Medicare (non‑dual) grew 6.0% and Medi‑Cal grew 6.5%. On a per‑member basis,…
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