In the 2010s, it appeared that US health care expenditures as a share of GDP had peaked. But there group at the Centers for Medicare and Medicaid Services that continually carries out and updates these estimates and forecasts. Their most recent projections suggest that US health spending is about to start rising again as a share of GDP. Sean P. Keehan, Andrew J. Madison, John A. Poisal, Gigi A. Cuckler, Sheila D. Smith, Andrea M. Sisko,Jacqueline A. Fiore, and Kathryn E. Rennie present the estimates in”National Health Expenditure Projections, 2024–33: Despite Insurance Coverage Declines, Health To Grow As Share Of GDP” (Health Affairs, July 2025).
For perspective, health care spending as a share of US GDP had been rising steadily over the half-century prior to 2010: 5% of GDP in 1960, 6.9% of GDP in 1970, 8.9% of GDP in 1980, 12.1% of GDP in 1990, 13.3% of GDP in 2000, and 17.2% of GDP in 2010.
However, in the decade after 2010, US health care spending as a share of GDP seemed to stabilize: for example, it was 17.4% of GDP in 2018 and 17.5% of GDP in 2019. When the pandemic hit, and US health care expenditures leaped to 19.5% of GDP in 2020. But by 2022, health care expenditures had fallen back to 17.3% of GDP, similar to the prevailing level in the 2010s.
But looking ahead, the authors from CMS write: “Each year for the full 2024–33 projection period, national health care expenditure growth (averaging 5.8 percent) is expected to outpace that for the gross domestic product (GDP; averaging 4.3 percent) and to result in a health share of GDP that reaches 20.3 percent by 2033 (up from 17.6 percent in 2023).”
What’s behind that overall estimate? The authors explain:
During 2024–33, Medicare spending is projected to grow the most rapidly, at a rate of
7.8 percent annually … , mostly as a result of strong average enrollment growth compared with Medicaid and private health insurance as the last cohort of baby boomers ages into Medicare through 2029. Although yearly spending trends are projected to be more volatile for Medicaid than for other payers, annual Medicaid spending growth is projected to average 6.4 percent for the period 2024–33, which is about the same as the program’s average during the twenty-year period 2000–19. For private health insurance, high growth in utilization, along with notable changes in enrollment, are expected to moderate during 2024–33, with spending projected to increase by 5.2 percent, on average. … The out-of-pocket share of total health spending is projected to decline from 10.4 percent in 2023 to 9.1 percent by 2033.
Of course, projections should always be taken with a grain of salt. I’ll take up the question of how to moderate the rise in health care spending some other day. Here, I’ll just make three points. First, an increase in health care spending can be a good thing when it is accompanied by broad improvements in overall health statistics for the population, which does not especially seem to be the case for the United States. Second, when an ever-increasing share of GDP goes to producing health care, that money isn’t available for other socially desireable goals–including wage increases and public spending priorities. Third, every dollar spent on health care is a dollar in income to some participant in the health care system, all of who believe that their work benefits patients, and all of whom can be counted on to protest loudly any attempt to slow the growth rate of such spending.
