U.S. Health Care Spending Hits $5.3 Trillion, Accounting for 18 Percent of Economy

By Ginika Igboke

U.S. health care spending totaled $5.3 trillion in 2024, according to newly released data from the Department of Health and Human Services, underscoring the sector’s growing impact on consumers, employers, and taxpayers.

The figure includes spending across federal and state programs such as Medicare and Medicaid, payments by individuals to insurers and providers, employer-sponsored coverage, and payouts by insurance companies.

The United States continues to spend more on health care than any other country—whether measured in total dollars, per-capita spending, or share of the national economy. Per-capita health care spending reached $15,474 in 2024, representing 18 percent of gross domestic product.

Health care spending has risen every year since 2000, increasing 77 percent faster than inflation over that period. It is now the nation’s largest industry by total spending and employment.

According to the Bureau of Labor Statistics, health care and social services employ more Americans than any other sector and remain among the fastest-growing industries in the country.

In 2024, about $18 of every $100 spent in the United States went toward health care—more than spending on housing ($12), groceries ($5), national defense ($4), or automobiles ($3).

Overall health care spending rose 7.2 percent in 2024, though price increases accounted for less than half of that growth. Health care prices increased 2.5 percent, below the overall inflation rate of 2.9 percent.

The Department of Health and Human Services said most of the increase was driven by higher demand for medical services, greater utilization, rising costs for non-medical goods and services, and demographic changes.

Americans spent $768 billion on non-medical health-related expenses in 2024, representing about 15 percent of total health care spending.

Most health care funding ultimately comes from individuals, whether through out-of-pocket payments, insurance premiums, taxes that fund public programs, or reduced wages as employers pay for health insurance. However, much of that money flows through intermediaries such as the federal government, state governments, and employers.

President Donald Trump and some Republicans in Congress have proposed shifting more control over health care spending to consumers, including by expanding funded health savings accounts instead of providing subsidies directly to insurance companies. Democrats have generally opposed the approach, favoring increased regulation and subsidies to control costs.

Health care accounted for 27 percent of all federal spending in 2024, making it the largest federal expenditure category.

The rising cost of health care remains Americans’ top financial concern. Recent polling from health policy research group KFF found that 66 percent of Americans worry about affording insurance premiums and medical bills—more than concerns about utilities, food, housing, or gasoline. More than half of respondents, 55 percent, said their health care costs increased over the past year.