U.S. health spending reached $5.3 trillion in 2024, or $15,474 per person and 18.0% of gross domestic product (GDP), according to the Centers for Medicare & Medicaid Services (CMS). Total spending grew 7.2% from 2023. That is growth in aggregate spending—not a 7.2% increase in every household’s bill, medical prices, or inflation-adjusted spending. The long-term trend is upward, but the factors behind it have shifted from era to era.
How to read the year-by-year rise in health spending
CMS’s National Health Expenditure Accounts (NHEA) are the official U.S. series for health spending. They track expenditures by year, service, funding source, and sponsor, with historical data extending to 1960. The latest observed year in the figures covered here is 2024. CMS historical National Health Expenditure Data
“Rising cost” can refer to several different measures. Total spending describes the size of the national bill; per-person spending divides that total by the population; GDP share compares health expenditures with the size of the economy. Annual growth in total spending is another measure. These figures are related, but they do not answer the same question. A higher total can reflect more people, more services, higher prices, or changes in the mix of care and how it is financed.
- Nominal spending: dollars spent in the year, without adjusting for inflation. The 7.2% growth figure for 2024 is nominal aggregate growth.
- Inflation-adjusted spending: spending expressed in dollars with general price changes accounted for. It helps compare purchasing power across years, but is not the same as medical-price growth.
- Per-person spending: total expenditures divided by the population; it is not an estimate of what a typical person personally paid.
- Share of GDP: health expenditures as a portion of the economy, indicating the sector’s relative scale rather than the cost facing a specific household.
CMS provides historical data and definitions for comparing years and measures. CMS National Health Expenditure Data
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What the latest annual figures show
In 2024, national health expenditures rose 7.2% to $5.3 trillion. Per-person spending was $15,474, and health expenditures equaled 18.0% of GDP. Each number describes a different dimension of the same national spending system.
Where the money was spent
| Service category, 2024 | Spending | Annual growth |
|---|---|---|
| Hospital care | $1,634.7 billion | 8.9% |
| Physician and clinical services | $1,109.7 billion | 8.1% |
| Retail prescription drugs | $467.0 billion | 7.9% |
These figures show the scale and growth of selected service categories. They do not, by themselves, identify why spending rose across the entire system.
Who financed the spending
| Payer or funding source, 2024 | Spending | Share of NHE | Annual growth |
|---|---|---|---|
| Private health insurance | $1,644.6 billion | 31% | 8.8% |
| Medicare | $1,118.0 billion | 21% | 7.8% |
| Medicaid | $931.7 billion | 18% | 6.6% |
| Out-of-pocket spending | $556.6 billion | 11% | 5.9% |
The service and payer tables are separate views of the same overall health-spending accounts. For example, hospital spending may be financed by several different payers. Do not add the two tables together. Figures are from CMS’s 2024 National Health Expenditure Fact Sheet. CMS National Health Expenditure Fact Sheet
Why health spending rose in different eras
There is no single cause that explains the full rise across every year. CMS’s historical analysis divides 1960–2013 into periods shaped by different combinations of coverage, use of services, prices, payment policy, economic conditions, and the mix of services and funding. Its era averages are historical, nominal figures—not current growth rates or a breakdown of 2024 growth. CMS Office of the Actuary, “History of Health Spending in the United States, 1960–2013”
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1966–1973: coverage expansion and greater utilization
CMS identifies this period with expanded coverage and growth in utilization. The implementation of Medicare and Medicaid is an important part of the historical context: broader coverage changed who could pay for care and helped shape demand and spending. This is an explanation of that period, not a claim that coverage expansion alone accounts for later increases.
1974–1982: rapid price growth
CMS characterizes this era as one of rapid price growth. In its historical table, personal health-care spending had average annual nominal price growth of 9.7%, compared with 4.5% average annual non-price growth. Those are period averages, not annual figures for every year or estimates of today’s price trend.
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1983–1992: payment changes and moderate price growth
CMS describes this era as a period of payment change and moderate price growth. Payment rules can influence how care is reimbursed and how spending develops, but this dated historical account should not be treated as proof that the same policies have the same effect now.
2008–2013: recession and modest recovery
CMS labels these years the Great Recession and modest recovery period. Average annual nominal NHE growth was 4.0% across the period in its historical analysis. Economic conditions can affect coverage, use, prices, and government spending; this period’s measured growth does not establish a universal recession effect.
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Across eras: changing services and funding
The NHEA tracks both what was purchased and how it was financed. A shift in the balance among hospitals, physician services, drugs, or other care—or among public programs, private insurance, and household payments—can change the aggregate even when no single category explains the overall trend.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What CMS projects for 2025–2034
CMS projects average annual national health expenditure growth of 5.4% over 2025–2034, compared with projected average annual GDP growth of 4.1%. It also projects the NHE share of GDP to rise from the observed 18.0% in 2024 to 20.6% in 2034. These are forecasts, not observed results; actual spending and economic growth may differ. CMS National Health Expenditure Fact Sheet
What the national trend means for a household budget
National expenditures are not a personal bill or a forecast of an individual’s insurance premium. Out-of-pocket spending is one component of the national total, while other expenditures are financed through private insurance and public programs. A household’s own costs depend on its coverage, care use, and other circumstances; the national figures alone do not determine those amounts.
For personal-finance comparisons, keep the measure aligned with the question: use per-person spending for a population average, out-of-pocket spending for the household-paid portion of national expenditures, and GDP share to understand health care’s scale in the economy. CMS also makes age- and sex-specific personal health spending data available through its National Health Expenditure Data resources, which can support more targeted comparisons than the national average. CMS National Health Expenditure Data
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