US Healthcare Spending Jumped to $5.3 Trillion, or 18% of Economy, in 2024

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By Yuval Rosenberg and Michael Rainey

Vice President JD Vance and Secretary of State Marco Rubio met with top officials from Denmark and Greenland on Wednesday as the Trump administration continues to push for U.S. control of the icy island. Danish Foreign Minister Lars Løkke Rasmussen told reporters afterward that the discussion was "frank and constructive" - diplospeak that suggests the meeting wasn't all that friendly. He added that "fundamental disagreements" remained and that a U.S. takeover of Greenland was "totally unacceptable." President Trump refused to back off his quest for the island. "We need Greenland for national security," he reiterated.

Here's what else is happening.

US Healthcare Spending Jumped to $5.3 Trillion, or 18% of Economy, in 2024

U.S. healthcare spending jumped 7.2% to $5.3 trillion in 2024, outpacing the growth of the broader economy, according to new data released by the Centers for Medicare & Medicaid Services. The 2024 increase roughly matched a 7.4% increase in 2023, and the two-year rise in spending was the highest since 1991 and 1992. For context: Gross domestic product rose by 5.3% in 2024 and 6.7% in 2023.

The healthcare spending total represented 18% of the economy, up from 17.7% the year before. The total also works out to an average of $15,474 per person, up from $14,580.

The 2024 increase in spending was driven by higher use of care and increased complexity of services provided, with such factors accounting for half of the annual rise. Price increases contributed roughly a third of the increase. "Prices are a factor. They're part of the equation. But non-price factors are the driver," Micah Hartman, a statistician for Medicare and Medicaid who is the lead author of the new report, told reporters Wednesday.

Spending on hospital care rose 8.9% to $1.6 trillion (31% of the annual total), while spending on physician and clinical services rose 8.1% to $1.1 trillion (21% of the total). Prescription drug spending increased 7.9% to $467 billion (9% of the total).

  • Private health insurance, which accounted for $1.6 trillion in payments in 2024, or 31% of total national healthcare expenditures, increased 8.8% following growth of 11.2% in 2023.
  • Medicare spending reached $1.1 trillion for the year, accounting for 21% of the annual total. Spending in the program rose 7.8% after climbing 9% in 2023. Total Medicare enrollment grew 2.2% to 66.6 million, and enrollment in Medicare Advantage plans grew 6.1% to 33.4 million beneficiaries. Total Medicare spending per enrollee grew 5.4%.
  • Medicaid spending climbed to $931.7 billion, up 6.6% - a rate of increase that slowed from the prior couple of years as enrollment in the program shrank by 7.9 million, or 8.6%, to 84.3 million. The drop in enrollment came as states began eligibility checks that had been suspended during the Covid-19 pandemic. As a result, spending per enrollee soared 16.6% in 2024 because healthier, lower-cost children and adults were no longer enrolled in the program, leaving a higher share of beneficiaries with complex or more costly medical needs. Higher provider payments also played a role, as did administrative costs that surged in large part as a result of the lapsing of those Covid-era policies. In all, Medicaid spending represented 18% of the national total in 2024.

The new data comes as millions of Americans face a surge in out-of-pocket costs for healthcare coverage as premiums rise and enhanced subsidies for Affordable Care Act plans have expired. The higher costs could result in a drop in the number of insured Americans, but the insured share of the population stayed at a high 91.8% as of 2024, just below the 2023 peak of 92.5%, according to the report.

The bottom line: Healthcare spending continues to grow as a share of the economy and federal spending on healthcare picked up again in 2024. The new report concludes by acknowledging that the outlook for healthcare spending will depend on a range of factors. "The future of health care spending remains uncertain," they write. "For example, developments in artificial intelligence and cancer treatment, as well as expanding policies and use around weight loss treatments and other healthy behavior initiatives, may affect the health care system in unexpected ways."

Trump Admin Sells First Batch of Venezuelan Oil for $500 Million

The Trump administration has sold Venezuelan oil for $500 million, according to an unnamed administration official who spoke to Semafor.

The sale marks the first time the administration has acted to fulfill President Trump's vow to "take back oil" from Venezuela, following the violent assault that resulted in the capture of President Nicolás Maduro and his removal to the United States to face criminal charges. Trump has stated that he plans to claim as much as 50 million barrels of oil from the South American energy giant, while using the money to benefit both the American and the Venezuelan peoples.

A spokesperson for the Department of Energy confirmed that the first sale had occurred, telling The New York Times that "the sales will continue indefinitely." The oil is reportedly being moved from storage tanks in Venezuela to facilities around the Caribbean and will likely end up being processed in U.S. refineries.

Controlling the funds: In an executive order signed Friday, Trump said that funds from oil sales would be under the control of the U.S., with foreign creditors and courts blocked from accessing the money. The main account for the funds is reportedly located in Qatar.

As Semafor's Shelby Talcott and Eleanor Mueller note, Treasury Secretary Scott Bessent said last week that his department would "oversee the accounts" and, at the direction of the president and Secretary of State Marco Rubio, manage payments back to Venezuela.

Raising questions: Some lawmakers have expressed concerns about the management of the Venezuelan oil funds. Sen. Jack Reed, the senior Democrat on the Armed Services Committee, told Semafor that he is waiting for a briefing from the Trump administration about "how they keep it and who distributes it."

Reed added that he is "innately suspicious" of using a Qatari account.

Democratic Sen. Elizabeth Warren also questioned the use of a foreign account. "There is no basis in law for a president to set up an offshore account that he controls so that he can sell assets seized by the American military," she told Semafor. "That is precisely a move that a corrupt politician would be attracted to."

US Pausing Immigrant Visas From 75 Nations

The State Department announced Wednesday that it will pause the processing of immigrant visa applications from citizens of 75 nations, based on concerns over the potential use of public assistance programs in the U.S. by migrants from those countries.

The suspension will begin on January 21, affecting applicants from nations spanning the globe, with a notable concentration in Africa, the Middle East and Latin America. Affected nations include Brazil, Colombia, Cuba, Nigeria, Liberia, Afghanistan, Thailand and Russia. The change will apply only to those seeking to move to the U.S., not those traveling for business or tourism.

The new policy expands President Trump's efforts to crack down on immigration from what he called "third-world countries." The Trump administration issued total or partial travel bans on 39 countries as of the first of the year. In November, Trump ordered the State Department to carefully vet visa applicants for the risk of becoming "public charges" - a reference to the use of any government benefits or assistance.

"The Trump administration is bringing an end to the abuse of America's immigration system by those who would extract wealth from the American people," the State Department said in a statement. "Immigrant visa processing from these 75 countries will be paused while the State Department reassesses immigration processing procedures to prevent the entry of foreign nationals who would take welfare and public benefits."

House Passes Funding Package for Treasury, State Departments

The House on Wednesday passed a package of two spending bills providing full-year funding for the departments of State and Treasury as well as the Internal Revenue Service, the District of Columbia, the federal judiciary, the Federal Trade Commission and other programs.

The overwhelmingly bipartisan 341-79 vote sends the package to the Senate, which is working to pass a previous package of three spending bills funding the departments of Justice, Commerce, Energy, Interior and other agencies. The House has now passed eight fiscal year 2026 appropriations bills covering 26% of all discretionary spending.

Appropriators expect to unveil another package of funding bills within days. Congress still faces a January 30 deadline to avoid a partial government shutdown.

Trump's 'Department of War' Rebranding Could Cost as Much as $125 Million: CBO

President Trump's executive order authorizing the Department of Defense to be called the Department of War as a secondary title could cost from $10 million to $125 million, depending on how extensively the new name is used, according to an analysis by the Congressional Budget Office.

A limited implementation of the new name to be used primarily by the Office of the Secretary of Defense would run about $10 million, according to the analysis. If the name change were pushed through more broadly and rapidly throughout the Defense Department, the costs could rise as high as $125 million.

Congress has shown no real interest in formally renaming the department, but if it formally approved such a change via legislation, the costs could rise to hundreds of millions of dollars, depending on how the change was implemented, CBO said.

The CBO analysis was requested by Senate Democratic Leader Chuck Schumer and Sen. Jeff Merkley, the ranking Democrat on the Senate Budget Committee.

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