"but if consumer spending is truly 70% of GDP, then GDP must contract if the consumers are paying more for everything."

edit to my own comment. The consumer spending will be shifting. But even if more of
the consumer take home pay is going to health care insurers, and home insurers, etc, the spending is still part of GDP. So maybe GDP doesn't contract ? But the spending will go to different entities. Doesn't bode well for sellers of discretionary purchase products. Does bode well for the well connected sellers of products and services. But is there a downstream ripple effect on the economy when insurance products are sold? There is definitely a downstream ripple effect, as noted by Sano, when products are consumed and repurchased in the course of everyday life.