This chart collection explores how health spending is expected to grow in coming years, based on National Health Expenditure (NHE) projections from federal actuaries. A related chart collection explores how U.S. health spending has changed over time using historical data, and an interactive tool allows users to explore health spending changes over time.
These projections do not account for recent regulatory changes under the Trump Administration, nor do they account for recent legislative changes in the tax and budget law (formerly “the One Big, Beautiful Bill Act”), which the Congressional Budget Office (CBO) expects to decrease spending on Medicaid and the Affordable Care Act (ACA) Marketplaces by over a trillion dollars through 2034.
U.S. health spending is expected to reach $8.6 trillion by 2033
Each year, actuaries from the Centers for Medicare and Medicaid Services (CMS) project future spending on health. CMS expects health spending to reach $5.6 trillion in 2025, with hospitals making up the largest share of spending ($1.8 trillion). By 2033, health spending is expected to hit $8.6 trillion.
Hospital spending is estimated to make up $2.7 trillion of total health spending in 2033. Physician and clinic spending and prescription drug spending are also expected to grow between 2025 and 2033 reaching $1.7 trillion and $776 billion, respectively.
Retail prescription drugs do not include drugs that are physician-administered in hospitals, physician offices, outpatient centers, long term care facilities, and at home. Trends in physician-administered drug spending may differ from trends in spending on retail prescription drugs.
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Growth in spending on hospitals and physician services is projected to slow in 2025
In 2025, hospital spending is estimated to have slowed to 6.8%. Growth in total hospital spending is expected to remain stable from 2026-2033.
After increasing over the last few years, the annual change in total spending on physicians and clinics is expected to slow. In 2026 and 2027, the annual change in total physician and clinic spending is estimated to be 5.1% and 5.4%, respectively. From 2028-2033, physician and clinical services growth is expected to moderate at an average annual rate of 5.1%.
Total prescription drug spending growth is expected to slow to a rate of 5.1% in 2026. From 2027-2033, growth is expected to decrease to an average annual rate of 4.8%.
Per capita health spending growth is expected to slow slightly in 2026
In 2025, per capita health spending growth is estimated to have slowed to 6.2%. Growth is expected to slow further in 2026 and 2027 to 4.7% and 5.2%, respectively.
From 2028-2033, per capita spending growth is projected to moderate at an average annual rate of 4.8%. During this period, national health spending is expected to outpace GDP, partly due to the growth in medical prices. However, several elements are expected to slow growth for both physician and clinical services, as well as drug pricing. First, pent-up demand from the COVID-19 pandemic has leveled demand for services. Second, with the expiration of the enhanced Marketplace subsidies, CMS estimates that private health insurance enrollment will decline, mainly in the Marketplace. Finally, the several provisions from Inflation Reduction Act’s (IRA) Medicare drug price reforms, which begin to take effect in 2026, are expected to put downward pressure on growth during this period.
Per capita prescription drug spending growth is projected to average 4.3% annually starting in 2026
Starting in 2026, per capita retail prescription drug spending growth is expected to average 4.3% through 2033, with moderated effects due to two provisions of the IRA – negotiated drug pricing, and a Medicare Part D per-person spending cap. IRA’s negotiated drug prices are expected to place downward pressure on Medicare and out-of-pocket spending, lowering net spending on select drugs by an average of 22%. The IRA also caps out-of-pocket spending on prescription drugs at $2,000, which is expected to slow drug cost increases over time. However, there is considerable uncertainty in projected prescription drug spending due to the potential introduction of new drugs, especially for diabetes, cancer, and autoimmune diseases.
Per capita out-of-pocket spending growth is expected to fall to lower levels beginning in 2026
After somewhat volatile growth during the early 2020s, CMS actuaries expect per capita out-of-pocket spending growth to average 3.3% from 2026 to 2033. The IRA’s Medicare prescription drug benefit changes, such as the elimination of the 5% coinsurance component for catastrophic coverage and the start of the $2,000 Part D out-of-pocket spending cap for Medicare beneficiaries, are expected to put downward pressure on average out-of-pocket spending.
Across all payers, per enrollee spending is expected to moderate after 2025
Growth in per enrollee Medicare spending is expected to slow, beginning in 2025. From 2026-2033, per enrollee growth is expected to range between 5.3% and 7.2%.
CMS actuaries project that per enrollee Medicaid spending will have grown by 15.2% in 2024. With Medicaid unwinding, younger and healthier Medicaid enrollees are more likely to be disenrolled, leading to higher per enrollee Medicaid spending. From 2025-2033, per enrollee Medicaid health spending is estimated to average 5.8%.
In the private insurance market, per enrollee spending growth is expected to decelerate in 2025 and 2026 to an average of 6.1% annually, partially due to a drop in Marketplace enrollment from the expiration of the Marketplace’s enhanced premium tax credits. From 2027-2033, per enrollee private insurance spending growth is expected to stay between 4.0% and 4.9%.
While these estimates offer insight into health spending across different markets, there remains significant uncertainty about how current legislative proposals may affect enrollment in both Medicaid and the Affordable Care Act (ACA) Marketplaces.
Across all services, out-of-pocket spending per capita is expected to continue increasing
Per capita out-of-pocket spending is expected to increase across all services through 2033. Out-of-pocket hospital services spending per capita is projected to increase at an average rate of 3.2% per year, reaching a high of $163 out-of-pocket per capita by 2033 – a 28.3% increase from 2025.
Out-of-pocket physician and clinical services spending per capita is expected to increase at an average rate of 2.6% annually during the same period. In 2025, physician and clinical service out-of-pocket spending is estimated to be $245 per capita but is expected to increase to $302 by 2033.
CMS expects out-of-pocket prescription drug spending per capita to increase at an average rate of 3.4% per capita from 2025-2033. Prescription drug out-of-pocket spending is projected to be $231 per capita in 2033, up from $177 in 2025.
Health spending is projected to account for over one-fifth of the U.S. economy by 2033
Health spending is estimated to have grown slightly quicker than the economy in 2026 and increase to 18.6%. Health spending growth is expected to outpace growth in the overall economy and eventually hit 20.3% of GDP by 2033.
Projecting health spending remains difficult but is expected to increase by 5.2% annually on average through 2033
The COVID-19 pandemic and its long-term effects on health spending have made projections even more difficult than in normal years, and even small differences in growth rates can add up to large spending differences over time. Volatile economic conditions, such as changing health employment and periods of inflation, can also impact the cost of health services. Additionally, legislative uncertainty in the Medicaid and ACA insurance markets can also make estimating health spending difficult.
Per capita health expenditures are projected to grow from $16,570 in 2024 to $24,200 in 2033, which is an average annual growth rate of 4.6%. If growth rates end up being 1 percentage point lower each year over that same period, per capita spending would be about $2,000 lower than expected in 2033. If growth rates end up being 1 percentage point higher each year, spending would rise to $26,601 per person in 2033 (about $2,000 per capita higher than expected).
Health spending projections for 2033 are 20% below what CMS would have expected in 2010
CMS actuaries’ estimates of total health expenditures from 2010 and 2015 projections extended out through 2033 indicate that health spending is now expected to be nearly $2.0 trillion less than what CMS had expected in 2010 projections and $421 billion less than 2015 projections.
In 2015, health spending was projected to reach $6.0 trillion by 2026. However, latest projections now estimate health spending to be $5.9 trillion in 2026. The difference in these estimations is partially due to a slowdown in health expenditure growth at the end of the 2010s.
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