National healthcare spending in the U.S. is projected to reach nearly $9 trillion by 2034, representing 20.6% of the economy, up from $5.3 trillion and 18% of GDP in 2024, according to CMS projections published June 24 in Health Affairs. The projections cite continued elevated healthcare utilization, legislative changes affecting Medicaid and ACA marketplace coverage, and demographic shifts toward Medicare as key drivers of spending growth.
Four things to know:
1. National healthcare spending is projected to have reached $5.7 trillion in 2025, reflecting 7.3% sector growth from 2024 — a third consecutive year of growth higher than 7%. CMS actuaries attributed the increase largely to continued elevated use of healthcare services and goods, including demand for high-cost prescription drugs.
2. Two major legislative developments are expected to reshape spending and coverage trends. HR 1 contains provisions projected to slow Medicaid spending growth and lower Medicaid enrollment starting in 2027, as eligibility will be conditional on meeting community engagement requirements for certain populations. Separately, CMS actuaries project that the expiration of enhanced premium tax subsidies for ACA marketplace plans after 2026 will contribute to declines in direct-purchase health insurance enrollment, including marketplace coverage.
3. The insured share of the population is expected to be 90.5% in 2034, compared with 91.8% in 2024. CMS actuaries project that provisions in HR 1 and the Inflation Reduction Act will reduce the insured share of the population from a historic high of 92.5% in 2023 to 90.4% through 2028.
4. Medicare is projected to see the fastest spending growth among major payers, averaging 7.7% annually from 2025-34. CMS actuaries attribute the increase to faster enrollment growth as the population ages, along with higher per-enrollee spending. Average annual national healthcare spending growth is projected to outpace GDP growth during 2029-34, with healthcare’s share of GDP expected to rise to 20.6% by 2034.
Read more about the projections here.
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