vs Last Month
−0.10 pts
Cooling slightly.
Medical Care Inflation
CPI Medical Care · YoY
3.40%
-0.10 pts vs. last month
Past 12 monthsRange 3.30 – 3.80
vs Last Year-0.20
5-Yr Avg3.85%
Long-run Avg~5.0%
Medical care inflation cooled to 3.40% — still above the Fed's 2% target but well below the long-run healthcare-cost-growth average of ~5%. The cumulative impact since 1980 is staggering: ~250% real-terms increase.
Historical trend
Monthly YoY change.
Source: FRED · CPIMEDSL
The long view: since 1980
Forty-five years of healthcare cost growth.
1980s Peak ~10%Methodology Dip −2.1% · 2023Today 3.40%
How today stacks up
vs Last Year
−0.20 pts
Down from 3.60%.
5-Yr Avg
3.85%
Today below 5-yr mean.
Long-Run Avg
~5.0%
1980–2020 average.
Use this rate
Tools for healthcare cost planning.
About Medical Care Inflation
Healthcare inflation has been one of the most persistent stories in the U.S. economy. From 1980 to 2024, medical care prices rose at roughly 5% per year on average — versus 3% for overall CPI. That cumulative gap means medical care in the U.S. is about 250% more expensive in real terms than it was 40 years ago. This tracker shows the year-over-year change in the BLS Medical Care CPI index, which covers physician services, hospital services, prescription drugs, and health insurance.
Why healthcare runs hot
Three structural drivers: (1) Demand is inelastic — you don\'t shop around when you need surgery. (2) Pricing is opaque — patients rarely know costs upfront, weakening market discipline. (3) Labor-intensive — healthcare costs reflect wages, and wages don\'t deflate. The result: healthcare CPI almost never goes negative even during recessions.
Reading this chart
Today\'s 3.40% is below the 5-year average but still above the Fed\'s 2% target. The 2021–22 dip and the unusual −2.1% reading in Sept 2023 were technical artifacts of how the BLS measures health insurance (which is tied to insurer profits — they revised methodology in late 2023). The smoother underlying trend is the more reliable signal.
Related trackers
Other live numbers that move with — or against — this one.
Frequently asked
What this number means, and what it doesn't.
Four components: medical care services (physician + hospital + dental + nursing), prescription drugs, medical equipment, and health insurance premiums. Health insurance is the trickiest to measure — BLS uses a complex methodology based on insurer profits and benefits.
A BLS methodology quirk for health insurance. When insurer profits fall, the implied "price" of insurance falls in the CPI calculation. The methodology was updated in 2023, causing the temporary dip. It's not that healthcare actually got cheaper — methodology changed.
Out-of-pocket costs only. CPI tracks the prices consumers face — it doesn't include employer-paid portion of insurance. Since the employee pays only a fraction of total premium, CPI Medical understates the full inflation in healthcare costs.
Yes, somewhat. Pre-COVID norm was ~3% per year. The 2022 spike (4.8%) reflected delayed catch-up pricing post-pandemic. The 2023 dip was methodology-driven. We're back near the pre-COVID trend at 3.40%.
Methodology
Source
Pulled from FRED · CPIMEDSL and cached on the EvvyTools server.
Update schedule
Refreshed automatically by our cron whenever the upstream source publishes a new value. Historical values are not revised after publication.
How we compute
Display value is the raw published number, unrounded. Comparison stats use the closest available reference date. We never edit the underlying data.