US Healthcare Costs 2033: 20.3% of GDP Forecast
- National health spending is projected to reach 20.3% of the U.S.
- CMS researchers, presenting their findings at a Health Affairs media briefing, predict health spending will increase by 5.8% annually through 2033, while the GDP grows at a rate...
- While health spending increases, CMS projects a decline in the number of insured Americans.
Projected U.S. healthcare costs are set too reach a staggering 20.3% of GDP by 2033, according to new CMS forecasts. This health spending increase, outpacing economic growth, is driven by factors like rising prescription drug costs, especially for obesity treatments, and shifts in insurance coverage. Medicaid enrollment declines are anticipated, with some transitioning to marketplace plans. State and local government spending will also increase. News Directory 3 delivers the essential details on these financial transformations shaping the future of the U.S. healthcare system. Discover what’s next in the evolution of individual health spending and wellness investments.
US health spending projected to reach 20% of GDP by 2033
Updated June 26, 2025
National health spending is projected to reach 20.3% of the U.S. gross domestic product by 2033, according to the latest figures from the Centers for Medicare and Medicaid Services (CMS). The forecast anticipates health spending growing 1.5% faster than the overall economy.
CMS researchers, presenting their findings at a Health Affairs media briefing, predict health spending will increase by 5.8% annually through 2033, while the GDP grows at a rate of 4.3%. The full details of the projections are slated for release in the July issue of Health Affairs.
While health spending increases, CMS projects a decline in the number of insured Americans. This is due, in part, to the unwinding of pandemic-era Medicaid expansions, with some of those losing Medicaid coverage expected to transition to marketplace plans.
Prescription drug spending is expected to see significant growth, with a projected 9.5% increase between 2023 and 2025. Analysts attribute this surge to the increased use of new medications, such as GLP-1 drugs, prescribed for obesity.
State and local government spending is also expected to rise, showing 10% growth through 2025. However, this projection does not account for potential impacts of future legislative changes that could affect Medicaid enrollment and programs.
What’s next
As health spending continues to climb as a percentage of GDP, consumers are likely to take on more financial obligation for their health care. Individuals are also redefining health spending to include investments in overall well-being, such as food, technology, and other resources that promote physical, mental, and social health.