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U.S. healthcare spending spiked 7.3% last year to reach $5.7 trillion, driven by soaring spending on hospital services and pricey prescription drugs like GLP-1s, according to new government data.
The sharp spending growth isn’t primarily caused by increasing prices. Cost growth has been moderate. Instead, Americans are consuming more healthcare after a lag during the coronavirus pandemic, Centers for Medicare & Medicaid Services actuaries said. It’s the same trend they called out in the national health expenditures report for 2024.
But the high rate of growth last year was still surprising, according to Jacqueline Fiore, an economist with CMS’ Office of the Actuary.
“Spending growth continuted to grow more rapidly for 2025 than we had expected,” Fiore said on a call with press Wednesday to discuss the projections, which CMS released in the journal Health Affairs.
