Health Costs

Costs • Coverage • Policy

Why does health care cost so much?

Health spending has grown for decades. But the country's total bill, an insurance premium, and what a patient pays at the doctor's office are different measures. This page separates them so the numbers are easier to understand.

Start here: National spending includes money paid by government, insurers, employers, and households. It is not the bill an average person receives.

Reviewed October 15, 2026. Historical U.S. spending ends in 2024; employer survey data end in 2025. Future policy dates are labeled.

1. U.S. health spending over time

The inflation-adjusted column puts each year's spending into 2024 buying power. The GDP column shows how much of the economy went toward health care.

On small screens, scroll tables sideways to see every column.

Sources: CMS National Health Expenditure Accounts, Table 1 (1960–2024 release); annual CPI from the Federal Reserve Bank of Minneapolis. Calculation: then-year spending × (2024 CPI ÷ that year's CPI), rounded to whole dollars; CPI inputs use the source's one-decimal annual averages. This uses general inflation, not a medical-price index. CMS figures are estimates and can be revised.

The 2020 GDP share rose during the pandemic, when health spending increased and the economy contracted. A higher share can reflect changes in either spending or the size of the economy. These comparisons alone do not measure the effect of a particular president or law.

2. What households pay

Premium

The payment to keep insurance. With job-based coverage, the employer and worker usually share it.

Deductible

What you pay for covered services before the plan starts paying for services subject to it.

Copay / coinsurance

Your fixed-dollar or percentage share when you receive covered care.

These are annual employer-plan averages, in dollars of each year. They do not represent Medicare, Medicaid, Marketplace plans, or every employer.

Sources: KFF/HRET 2010 survey, KFF 2020 survey, and KFF 2025 survey. Deductibles cover only workers whose single-coverage plans have a general annual deductible; they are not family deductibles or actual annual spending. Employer contribution is total premium minus worker contribution.

Survey scope changed: 2010/2020 included firms with 3+ workers; 2025 includes firms with 10+ workers. Values shown are from each year's published survey, so comparisons are broad benchmarks rather than a perfectly fixed sample.

Do not add the single deductible to the family premium. Your own total depends on coverage tier, services used, network, and plan rules. Premiums generally do not count toward an insurance plan's out-of-pocket maximum.

3. How does the U.S. compare?

Explore the full international comparison: spending, coverage and patient costs →

Purchasing power parity (PPP) adjusts currencies for differences in buying power. These figures include public and private spending, not just what patients pay directly.

Source: OECD Health at a Glance 2025 country notes (linked in each row) and Figure 7.4 and comparability notes. The release uses 2024 or nearest-year data and includes estimates; it is a publication snapshot, not a live ranking.

The U.S. figure differs from the CMS table because OECD uses an internationally harmonized current-spending measure, excludes capital investment, and reflects a different release vintage. Compare countries within this table. Spending alone does not tell us waiting times, access, or quality.

4. Before and after Obamacare

Obamacare and the Affordable Care Act (ACA) are the same law. It was enacted in 2010; major coverage expansions began in 2014.

Sources: HealthCare.gov rights and protections; CMS program history; KFF pre-ACA market review; ACA overview; pre-existing conditions; preventive services; benefit limits; grandfathered plans. The ACA expanded access and changed insurance rules; the historical spending table does not establish how much spending it caused or prevented.

5. What is changing now?

The 2025 reconciliation law, commonly called the One Big Beautiful Bill Act (Public Law 119-21), was signed July 4, 2025. CMS also calls it the Working Families Tax Cut legislation.

Two separate changes: Temporary enhanced ACA premium tax credits applied in 2021–2025 and expired after 2025. The underlying ACA credit continues for eligible households. The 2025 reconciliation law made additional eligibility, repayment, and Medicaid changes; its effects have different start dates.

This is a selected summary, not every provision. CMS guidance and links to Public Law 119-21 and IRS current tax-credit rules provide detail. Proposed regulations are labeled; future dates describe scheduled implementation, not outcomes already observed. State decisions, exemptions, and later legal changes can affect individual results.

6. Why your premium can rise faster than the average

An average combines plans with different costs. Your payment also depends on how much the employer contributes. In FEHB, the government generally pays the lesser of 72% of the program's weighted-average premium or 75% of your chosen plan's premium. A plan growing faster than the contribution cap can leave employees paying a much larger increase.

OPM’s 2027 Open Season highlights reports a 9.3% average total FEHB premium increase and a 10.9% average enrollee-share increase. Those are different measures.

A concrete example: MHBP Standard

Employee share per biweekly paycheck. These are FEHB Standard rates, not Postal Service plan rates or retiree monthly amounts.

Sources: OPM 2026 fee-for-service rates and MHBP 2027 Standard rates. Percentage increase = (new − old) ÷ old. Self and Family increases by $182.58 per paycheck, or about $4,747 across 26 biweekly payments. This is premiums only.

This example does not establish why this particular plan raised its prices. Comparing plans means checking doctors, prescriptions, deductibles, and out-of-pocket limits alongside premiums. A plan's name and coverage tier matter.