U.S. healthcare spending is set to climb to $9 trillion by 2034, representing 20.6% of the economy, according to new federal data.
The Centers for Medicare & Medicaid Services Office of the Actuary released on Wednesday its annual projections around national health spending. The actuaries said that total health spending in 2024 was $5.3 trillion, or about 18% of the U.S. economy.
Factors driving spending growth include elevated utilization for medical services and goods, which the analysts expect to continue through 2026 before beginning to taper off. In addition, major legislative changes—including the broad overhaul of Medicaid—will play a key role through 2028.
Beyond that point, the actuaries expect a continued shift toward enrollment in public coverage programs, namely Medicare, to contribute to increased spending over the next decade.
Jacqueline Fiore, an economist with the Office of Actuary and one of the report’s authors, told reporters during a briefing Wednesday morning that one of the leading drivers of increased utilization and cost in the near term is prescription drugs.
“For the major spending categories, retail prescription drugs is the fastest growing major spending category over the projection period,” she said.
She added that this trend is partly backed by increasing demand for high-cost pharmaceuticals in both Medicare and commercial plans. In particular, GLP-1s and pricey oncology drugs for Medicare beneficiaries are key spending drivers, Fiore said.
The report estimates that health spending reached $5.7 billion in 2025, up 7.3% from 2024. This would make for a third straight year of growth over 7%, per the actuaries. Health expenditures are set to increase faster than the increase in gross domestic product for 2025 (5%), growing to 18.4% of the economy.
The actuaries anticipate that healthcare spending will continue to grow faster than the rest of the economy during the decade included in the analysis. However, the report does estimate that the growth rate will slow to 4.9% during the 2027 and 2028 period as utilization stabilizes and there is a decline in Medicaid enrollment due to changes made as part of the One Big Beautiful Bill Act.
In the later half of the projection window, escalating Medicare enrollment will likely bump up spending growth again, with growth expected to average 5.2% between 2029 and 2034.
With significant legislative changes playing out over the next decade, the actuaries also estimate that the uninsured rate will tick up by 2034. They project that 90.5% of people will be insured in 2034, decreasing from 91.8% in 2024.
“These legislative provisions play a key role in reducing the insured shared population,” said Fiore.