Healthcare can be an expensive budget category for many people. So far, the PCE (Personal Consumption Expenditures) price index shows healthcare inflation running at just under 3% year-over-year. That may seem reasonable, with the full index currently calculated at 4.4%. But our colleagues in Goldman Sachs Research don’t think that’s the whole story.
In their view, healthcare prices appear unsustainably low and likely to accelerate in the near future. Here’s why:
TL;DR: Our colleagues expect healthcare PCE inflation to peak in early 2024 at 4.0%, as consumer prices catch up to the costs of delivering healthcare, before moderating later in 2024 and in 2025.
And government price setters seem to agree. The preliminary proposal for a 2.8% Medicare fee hike in 2024 is considerably lower than the 4.3% increase for 2023.
This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs® but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.