Another $284 billion.
Where does it go?
CMS expects U.S. health spending to reach $6.30 trillion in 2027. A slower growth rate still creates a substantial increase in dollars.
Growth can slow while the market still gets larger. That is the central distinction in the federal government’s outlook for 2027.
The CMS Office of the Actuary projects national health expenditures of $6.017 trillion in 2026 and $6.302 trillion in 2027. The $284.2 billion increase represents 4.7% growth, compared with 6.3% projected for 2026. Both years are forecasts, measured in current dollars.
In its forecast summary, CMS attributes the 2027–28 slowdown to declining Medicaid enrollment under new eligibility requirements and more moderate growth in the use of healthcare services and goods. Its 4.9% headline for that period is a two-year annual average; the individual 2027 estimate is 4.7%. Read the federal assessment ↗
Where the next dollars go
- Hospital care
- Physician & clinical
- Retail prescriptions
- Nonmedical insurance
- Other health & personal care
Five-category subtotal · current dollars · both years projected
Increase within each category, 2027 minus 2026 · $ billions
Large categories create large dollar changes.
Hospital care adds $79.6 billion and physician and clinical services add $59.3 billion. Together, they account for $138.9 billion of the national increase. Their scale makes even modest changes in growth consequential.
The five largest detailed categories contribute $222.9 billion, or 78.4% of the total increase. They include nonmedical insurance expenditures, a category covering administration, reserves, taxes and underwriting gains or losses. It should not be interpreted as insurer profit alone.
Retail prescription drugs add $26.1 billion. That category excludes medicines supplied within hospital or physician services, an important boundary for the medical pharmacy analysis that follows.
What does this mean for a planning decision?
The baseline identifies where to investigate. A payer product forecast then needs the relevant covered population, service mix, payment arrangements and a credible view of how much spending a product can influence.
For an initial research program, I would separate three questions: how much of the change comes from coverage and enrollment; how much comes from utilization and treatment mix; and how much reflects prices or payment policy. This chart allocates dollars across expenditure categories. It does not yet attribute those dollars to those underlying causes.
The useful question is how a national forecast changes the decision in front of you.
| Expenditure category | 2026 | 2027 | Change |
|---|---|---|---|
| Hospital care | 1,870.5 | 1,950.1 | +79.6 |
| Physician & clinical services | 1,244.5 | 1,303.8 | +59.3 |
| Retail prescription drugs | 561.5 | 587.6 | +26.1 |
| Nonmedical insurance expenditures | 376.9 | 413.3 | +36.4 |
| Other health, residential & personal care | 374.8 | 396.3 | +21.5 |
| Five-category subtotal | 4,428.2 | 4,651.1 | +222.9 |
| Remaining spending | 1,589.2 | 1,650.5 | +61.3 |
| National health expenditures | 6,017.4 | 6,301.6 | +284.2 |
Sources & method
CMS Office of the Actuary, National Health Expenditure Projections 2025–34, released June 24, 2026. Table 2, columns J and K. The five largest non-overlapping detail categories are ranked by 2027 spending; the same five lead in 2026. Differences are calculated from published amounts rounded to $0.1 billion. The remaining spending reconciles the five-category subtotal to total national expenditures. These are national projections, not summed state forecasts.