Health care spending reaches $5.3 trillion, or 18% of U.S. economy, in 2024

Physician and clinical services reached $1.1 trillion in 2024, or 21% of that year’s total spending of $5.3 trillion toward health care.

The 2024 national health expenditure (NHE) tally was published in Health Affairs, with Executive Editor and Interim Editor-in-Chief Donald E. Metz hosting an online briefing with statisticians of the National Health Statistics Group in the Office of the Actuary of the U.S. Centers for Medicare & Medicaid Services. Statistician Micah Hartman presented data with Deputy Director Aaron Catlin and analysts Anne Martin and David Lassman.

In 2024, the nation spent the estimated equivalent of $15,474 per person on health care. Health care spending made up 18% of the U.S. economy, with total spending up 7.2% from 2023. The year before, 2023 expenditures were up 7.4% from 2022.

“The strong growth in 2023 and in 2024 was driven by use and intensity on a per capita basis,” Hartman said. “It increased 3.6% in 2024 and 3.5% in 2023. This reflected increased demand for medical care. The increase follows an overall downturn in demand during the most significant impacts of the COVID-19 pandemic.”

Strong consecutive growth

The years 2023 and 2024 were the strongest consecutive years of spending growth since 1991 and 1992, when the nation was emerging from an economic recession, Hartman said. The years 2023 and 2024 also had high levels of insurance coverage for the population — a peak of 92.5% in 2023 and 91.8% in 2024.

The national health expenditures accounted for 18% of the nation’s gross domestic product (GDP), up from 17.7% in 2023 and 17.6% in 2022. The annual growth of health care spending is outpacing growth of GDP: 7.4% vs. 6.7% in 2023, and 7.2% vs. 5.3% in 2024, according to the CMS figures.

Paying doctors for care

Physician and clinical services made up 21% of health care spending, reaching $1.1 trillion in 2024 and up 8.1% from 2023.

Hospital care hit $1.6 trillion, or 31% of the total health care spend. The 2024 spending rose 8.9%, as a percentage down from 10.6% growth in 2023.

Prescription drugs accounted for $467 billion, or 9% of the total health care expenditure. The 2024 growth of 7.9% was down from 10.8% growth in 2023. Prescriptions dispensed in 2024 grew by 2.5%, down from 2.9% growth in 2023. Demand for drugs to treat diabetes and obesity increased in 2024, though prescription drug prices slowed at 1.4% growth, compared with 2.3% price growth in 2023.

Insurance coverage

The NHE included a breakdown of insurance coverage for the nation.

An estimated 214.3 million Americans had private health insurance; among them:

• 178.6 million people have employer sponsored insurance plans
• 36.7 million people have direct purchase insurance, including:
• 21.1 million people through the Affordable Care Act Marketplaces
• 12.6 million people through Medigap
• 3 million through other direct purchase plans

Medicare covered 66.6 million Americans. There were 28 million people without health insurance in 2024.

Medicaid decline

Medicaid coverage peaked at 92.2 million people in 2023 but dropped 7.9% to 84.3 million in 2024. Toward the end of 2023 and in 2024, states continued to redetermine eligibility following the end of the COVID-19 pandemic public health emergency, Hartman said.

Spending growth

For 2024 health care spending, Medicaid showed the greatest annual growth per enrollee, jumping from 6.5% in 2023 to 16.6% in 2024.

Hartman said the large increase most significantly was due to a change in the mix of the population. A higher proportion of enrollees with greater health care needs remained enrolled, while lower cost children and adults disenrolled due primarily to states resuming the eligibility redeterminations after the end of pandemic era. Coverage provisions, rising provider rates and growth in state directed payments also were factors.

Annual spending growth per enrollee dipped for Medicare (6.7% in 2023 vs. 5.4% in 2024) and for private health insurance (9.6% in 2023 vs. 5.2% in 2024.)

Health insurance enrollment

Hartman and his colleagues stuck to the 2024 numbers in their presentation and did not touch on the last year’s and current developments in Washington, D.C.

For months last year, Democrats argued the One Big Beautiful Bill Act, the spending plan approved by congressional Republicans and President Donald J. Trump, would gut the Medicaid program.

This year, Congress still has been wrangling over an extension of tax credits that helped people pay for ACA Marketplace coverage. With those subsidies expired at the end of 2025, health care observers are predicting the number of uninsured Americans will swell. The enrollment deadline is Jan. 15.

As of Jan. 12, CMS reported 22.8 million people signed up for 2026 health insurance coverage since the open enrollment period started Nov. 1 last year. That includes 15.6 million through the ACA Marketplace and 7.2 million through state-based exchanges.

At this time in 2025, enrollment was 23.6 million people, up from a record 21.4 million who signed up for 2024 health insurance in late 2023 and early 2024.

Revising 2022

The CMS analysts rely primarily on CMS data, but examine other sources to measure spending. The 2024 compilation was noteworthy because CMS added U.S. Census Bureau data to conduct a comprehensive revision on estimates dating back to 1960, Hartman said.

The comprehensive revision happens every five years and revised the 2022 health care expenditures upward; that year health care made up 17.6% of the nation’s GDP, up from the previous estimate of 17.4%