Fiore et al. (2026) just released their annual national health expenditure projections in Health Affairs. I summarize some of the key findings in Q&A format.
How much is the US currently spending on health care?
$5.7 trillion.
This is represents an increase in healthcare spending as a share of GDP from 18.0% in 2024 to 18.4% in 2025.
What will healthcare spending be in the US in 2034?
By 2034, national health spending is projected to total nearly $9.0 trillion and to represent 20.6 percent of the economy, compared with $5.3 trillion and 18.0 percent in 2024.
What legislative changes will have the biggest impact on national health expenditures?
The 2025 budget reconciliation legislation, known as the One Big Beautiful Bill Act (OBBBA), contains several requirements that affect Medicaid spending and enrollment over the course of 2025–34. The first lowers the maximum allowable payment rate for new or renewed state-directed payments (which disproportionately affects spending by Medicaid on hospital and nursing facility services) and is projected to put downward pressure on Medicaid spending growth. The second is projected to limit growth in Medicaid spending, starting in 2026, by freezing existing provider tax rates and gradually reducing states’ ability to use Medicaid provider taxes to generate federal matching funds. The third is projected to dampen Medicaid spending growth by lowering Medicaid enrollment starting in 2027, as Medicaid eligibility will be conditional on meeting community engagement requirements for certain populations (generally nondisabled, working-age adults, especially adults eligible under Medicaid expansion in the Affordable Care Act [or expansion adult group])…
The Inflation Reduction Act (IRA) of 2022 contained temporary extensions of enhanced premium tax subsidies for qualified individuals enrolled in Marketplace plans. These enhanced subsidies expire in 2026
Additionally, IRA provisions are expected to decrease Medicare beneficiary out-of-pocket cost, but increase Medicare drug spending. While IRA may reduce drug prices, the reduced cost sharing is projected to more than offset any Medicare Drug Price Negotiation discounts.
Where will spending increase most: commercially insured, Medicaid, or Medicare?
Over the course of 2025–34, Medicare is projected to experience the highest spending growth (7.7 percent per year, on average) among the major payers, reflecting faster per enrollee spending growth and faster enrollment growth partially driven by demographic factors…
More generally, federal government share of healthcare spending is projected to increase from 31% in 2024 to 33% in 2034.
Will drug spending grow faster or slower than overall health spending?
Whereas overall health spending is projected to increase by 5.4% per year between 2025-2034, pharmaceutical spending is expected to increase by 5.7% per year over the same time frame.
The study has a lot of great statistics and you can read the full article here.
