Washington, D.C. – U.S. health care spending rose 7.3% last year to $5.7 trillion, driven by higher demand for medical care and the growing use of high-cost drugs, according to new federal projections.
The report from federal health actuaries found that national health spending grew faster than 7% for the third consecutive year. Health care accounted for 18.4% of the U.S. economy in 2025, up from 18% in 2024.
Hospital spending remained the largest category, rising 8.2% to $1.8 trillion. Spending on physician and clinical services increased 6.2% to $1.2 trillion, while prescription drug spending jumped 11.1% to $518.7 billion.
Axios reported that GLP-1 weight-loss and diabetes drugs, cancer treatments, increased physician visits, and an aging population helped drive the growth. Federal actuaries project national health spending will approach $9 trillion by 2034 and account for 20.6% of the economy.
Medicare spending is expected to grow about 9% annually through 2034, while Medicaid spending growth is projected to slow this year after changes in last year’s Republican budget law.
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