National Health Spending Soared For 2nd Consecutive Year In 2024

The U.S. spent $5.3 trillion on health care in 2024, an increase of 7.2 percent from the prior year, as Americans' use of medical services like hospital care and prescription drugs continued to grow, according to a Centers for Medicare and Medicaid Services report published Wednesday in the journal Health Affairs.

The uptick follows a similar increase of 7.4 percent in 2023. National health spending grew 4.1 percent in 2021 and 4.8 percent in 2022.

Why it matters: The two-year trend of more than 7 percent spending growth comes as more Americans are covered by health insurance and have sought out care at higher levels than health insurers anticipated, according to the CMS report.

The back-to-back growth is the strongest in decades and represents “a rebound or return of demand that was suppressed” during the Covid pandemic, said Micah Hartman, a statistician in the National Health Statistics Group with the Office of the Actuary at CMS, during a Wednesday press briefing on the report.

In earnings calls over the past few years, health insurers have repeatedly noted the rising medical cost trend as a major pressure on their bottom lines. Last year, several major insurers slashed their yearly financial guidance amid unexpectedly high medical costs in Medicaid and Obamacare plans.

The insured share of the population was 91.8 percent in 2024 after peaking at 92.5 percent in 2023. The strong coverage levels were bolstered by the 2022 extension of enhanced Affordable Care Act subsidies, which helped millions of low- and middle-income Americans afford Obamacare coverage with little-to-no premium payments. The enhanced subsidies expired at the end of 2025, but Democrats and some Republicans in Congress are pushing to extend them.

The slight decrease in the share of insured Americans from 2023 to 2024 was partially driven by the end of Medicaid continuous enrollment — where states began kicking ineligible people off their Medicaid rolls for the first time since the beginning of the pandemic. Medicaid enrollment peaked at more than 92.2 million in 2023 but decreased to 84.3 million in 2024, according to the CMS findings.

The share of the nation’s gross domestic product spent on health care was 18 percent in 2024, up from 17.6 percent in 2022 and 17.7 percent in 2023. National health spending outpaced the GDP growth rate of 5.3 percent in 2024.

Key context: Other large, wealthy countries spend about half as much per person on health care on average as the U.S. does. Fourteen of its peer countries spent an average of 11 percent of GDP on health care in 2023, according to a KFF analysis of Organisation for Economic Co-operation and Development data.

What’s next: The office did not release updated projections for future spending but said that data will be released in a forthcoming report.

“The future of health care spending remains uncertain,” the report says, noting that artificial intelligence and cancer treatment advancements, and changing policies around weight-loss treatments “may affect the health care system in unexpected ways.”

The report concluded: “Although some of the recent factors affecting utilization and insurance coverage might not persist, health spending trends are certain to be affected by future economic and demographic changes, as well as by new technologies and innovations.”