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U.S. Health Spending Hits $5.3 Trillion in 2024 on Utilization Surge, CMS Says

CMS actuaries attribute the jump largely to higher use and intensity of care, not broad price increases.

U.S. dollar banknotes and medicines are seen in this illustration taken, June 27, 2024. REUTERS/Dado Ruvic/Illustration

Overview

  • Health outlays equaled 18% of GDP in 2024, up from 17.7% in 2023, as spending growth outpaced the broader economy.
  • Hospital care reached $1.6 trillion, up 8.9%, with physician and clinical services up 8.1% to $1.1 trillion and retail prescription drugs up 7.9% to $467 billion.
  • ACA marketplace enrollment rose over 30% to about 21.1 million people, increasing federal subsidy costs and expanding private coverage.
  • The federal government was the largest sponsor of health spending at roughly $1.7 trillion, reflecting higher Medicare outlays and greater marketplace support.
  • Medicaid eligibility reviews reduced enrollment but raised per‑enrollee spending by 16.6% and drove administrative costs higher, including a 19.8% jump in Medicaid administration within a 14.7% overall increase.