Nation's health care tab hit $5.7 trillion last year
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Growing demand for medical care and high-cost drugs helped drive up national health spending 7.3% last year, to $5.7 trillion, according to new projections federal actuaries released on Wednesday.
The big picture: It marked the third consecutive year that health spending rose above 7% — a trend that's likely to continue this year and intensify affordability concerns.
- The actuaries project that outlays for medical care and services will reach nearly $9 trillion by 2034 and represent 20.6% of the economy.
By the numbers: Health care's share of the overall economy rose to 18.4% last year, up from 18% in 2024, due to higher demand for physician care and clinical services and expanded use of GLP-1 drugs and cancer treatments.
- Hospital spending remained the biggest category of medical services, rising 8.2% in 2025 to $1.8 trillion.
- Physician and clinical services spending grew 6.2% to $1.2 trillion.
- Overall prescription drug spending was up 11.1%, reaching $518.7 billion.
Between the lines: Health price growth has been fairly moderate and is expected to average roughly 2.5% through 2026.
- But demand for care and services has been surging as more Americans have had disposable income and health coverage to cushion the costs.
- Robust use of GLP-1s is expected to continue through this year, after which the market may become saturated and spending would begin to come down, said Jacqueline Fiore, an economist in the National Health Statistics Group of the Centers for Medicare and Medicaid Services Office of the Actuary.
Zoom in: The aging population and a shift to more home health services is putting more pressure on Medicare, with federal spending on the program projected to rise an average of 9% annually through 2034.
- The report captures the Inflation Reduction Act's effects on Medicare drug spending. While the amount patients spend on drugs is lowered by provisions like an out-of-pocket cap and drug price negotiations, program spending is rising as more drug costs are shifted onto the government.
Spending growth in Medicaid is projected to slow this year due to changes in last year's Republican budget-and-spending law.
- The actuaries project new limits on state-directed payments and restrictions on provider taxes are expected to result in slower Medicaid spending growth, at 4.8% this year, down from 8.3% in 2025.
