NEW URGENCY TO ADDRESS ROOT CAUSES OF AFFORDABILITY CRISIS AS HEALTHCARE SPENDING HITS RECORD $5.7T

The following information was released by the America's Health Insurance Plans (AHIP):

by AHIP

New government data shows U.S. healthcare spending reached a record $5.7 trillion in 2025 rising 7.3% in just one year and continuing a trend of healthcare costs growing faster than the broader economy.

By the numbers:

Hospital spending already the single largest category of healthcare spending climbed 8.2% to $1.8 trillion last year.

Spending on physician and clinical services rose 6.2% to $1.2 trillion.

Prescription drug spending jumped more than 11% to $518.7 billion.

Experts from the Centers for Medicare and Medicaid Services (CMS) found that demand for high-cost drugs was a major contributor to the rise in spending.

A bipartisan imperative:

Recent polls show that rising healthcare costs are a top concern for Americans across the political spectrum and voters strongly support common-sense policy solutions to address the root causes driving the healthcare affordability crisis.

At the same time, policymakers and experts across the political spectrum are increasingly spotlighting cost-drivers such as hospitals' high prices, anticompetitive consolidation and opaque billing practices along with private equity's growing role in healthcare and drugmakers' pricing practices.

Common-sense policy solutions are needed:

Policymakers can address voters' affordability concerns by enacting common-sense, bipartisan solutions, such as:

Promote hospital competition by stopping anti-competitive mergers that raise prices and reduce choices for consumers.

Enact site-neutral payment reforms so patients are not forced to pay more for the same service simply because it is delivered in a hospital-owned setting.

Strengthen enforcement of surprise billing protections to address growing, costly abuses by some private equity-backed providers and middlemen who game the system to maximize their own profits at Americans' expense.

Curb pharmaceutical patent abuse and rein in brand drugmakers' lavishly-funded, tax-deductible direct-to-consumer advertising campaigns to lower costs and restore competition in the prescription drug market.