The average cost of healthcare in the United States reached $15,474 per person in 2024, bringing total national health spending to $5.3 trillion. That figure grew 7.2 percent from the previous year, continuing a two-year trend of elevated spending driven largely by increased demand for medical services. For context, healthcare now consumes 18 percent of the entire U.S. economy.
Where the Money Actually Goes
Not all healthcare dollars are spent equally across services. Hospital care is by far the largest category, accounting for 37.2 percent of personal health spending. Physician and clinical services come next at 24.1 percent, followed by prescription drugs at 11.5 percent. Smaller but significant shares go to nursing care facilities (5.4 percent), dental services (4.5 percent), and home health care (3.5 percent).
That means for every dollar spent on healthcare, roughly 37 cents goes to hospitals before anything else. This concentration helps explain why a single hospitalization can generate bills that dwarf years of routine care. Prescription drugs, while frequently discussed as a cost driver, represent a smaller slice of overall spending than most people assume.
What You Pay Depends on Your Insurance
The $15,474 per-person figure is a national average that blends together everyone from newborns on Medicaid to seniors on Medicare to working adults with employer coverage. Your actual costs depend heavily on how you get your insurance.
Employer-sponsored plans generally have lower monthly premiums than plans purchased on the individual marketplace, according to a Government Accountability Office comparison of 33 states. However, the picture flips when you factor in subsidies: after employers contribute to premiums on one side and federal tax credits reduce marketplace premiums on the other, marketplace enrollees often pay less out of their own pockets each month than employees do. The tradeoff is that marketplace plans tend to carry higher deductibles, meaning you pay more before insurance kicks in. That said, a higher percentage of marketplace enrollees are in plans with no deductible at all, which complicates any clean comparison.
There’s another wrinkle most people overlook. Contributions to employer-sponsored plans are made with pre-tax dollars, so the true after-tax cost to employees is lower than the sticker price. This tax advantage doesn’t show up on a pay stub but effectively reduces what employer coverage costs you by your marginal tax rate.
How Costs Change With Age
Healthcare spending follows a predictable arc over a lifetime, and it’s far from evenly distributed. After the first year of life (which carries its own elevated costs), spending stays relatively low through childhood and young adulthood, rises slowly through middle age, and then climbs steeply after 50.
The numbers tell a striking story. Annual spending for a 20-year-old averages around $1,448, while a 65-year-old averages $10,245 per year. By age 85, that figure reaches $17,071. People 85 and older consume roughly three times as much healthcare per person as those aged 65 to 74, and twice as much as those 75 to 84.
Zoom out to a lifetime perspective and the pattern is even more dramatic. Only about a fifth of total lifetime healthcare spending occurs during the first half of life. Nearly half, around 48.6 percent, accrues after age 65. Young adulthood (ages 20 to 39) accounts for just 12.5 percent of lifetime costs, while the senior years from 65 to 84 account for 36.5 percent. This concentration of spending in later life is a major reason Medicare is such a large and growing part of the federal budget.
Wide Gaps Between States
Where you live also shapes what healthcare costs. Per-capita spending varies dramatically across states. At the high end, Washington D.C. spends $14,381 per person, followed by New York at $14,007 and Alaska at $13,642. At the low end, Utah comes in at just $7,522, with Idaho at $8,148 and Nevada at $8,348. That’s nearly a two-to-one gap between the most and least expensive states.
These differences reflect a mix of factors: local cost of living, how many specialists practice in the area, the health profile of the population, and how aggressively providers price their services. Living in a high-cost state doesn’t necessarily mean you get better care. It often just means the same services carry higher price tags.
How the U.S. Compares Globally
The United States is a dramatic outlier in healthcare spending. At $14,885 per person (adjusted for purchasing power), the U.S. spends nearly two and a half times the average of other wealthy nations in the Organisation for Economic Co-operation and Development, where the average is $5,967 per person. As a share of GDP, the U.S. devotes 17.2 percent of its economy to healthcare compared to an OECD average of 9.3 percent.
That gap persists despite the fact that the U.S. has shorter life expectancy and higher rates of chronic disease than many peer countries. The premium Americans pay doesn’t translate into better population-level health outcomes. It reflects higher prices for the same services, greater administrative complexity, and more intensive use of expensive technology and specialist care.
Projected Growth Through 2030
Healthcare costs are expected to keep climbing. The CMS Office of the Actuary projects national health spending will grow at an average annual rate of 5.1 percent from 2021 through 2030, with the pace picking up slightly to 5.3 percent annually in the second half of that window (2025 to 2030). That rate consistently outpaces general economic growth, meaning healthcare will consume an even larger share of the economy in the years ahead.
For individuals, this translates to rising premiums, higher deductibles, and growing out-of-pocket costs. For the country, it means an ever-larger portion of federal and state budgets flowing toward Medicare, Medicaid, and other public health programs, leaving less room for other priorities. The trajectory has been remarkably consistent for decades, and nothing in current policy is expected to fundamentally alter it.