June 12, 2024
How Does Government Healthcare Spending Differ From Private Insurance?

The United States spent $4.5 trillion on healthcare in 2022, according to the Centers for Medicare and Medicaid Services (CMS). But what does that huge number really mean, given the complex, overlapping system of public and private healthcare insurance? Who is “spending” all this money, and who receives it? Here is a breakdown:

  • Government insurance programs, such as Medicare and Medicaid, made up 45 percent, or $1.9 trillion, of national healthcare spending.
  • Private insurance programs, including employer-provided health insurance as well as plans purchased through the Affordable Care Act, accounted for 30 percent, or about $1.3 trillion.
  • Out-of-pocket spending, such as premiums paid by individuals and other out-of-pocket costs, spending by third-party payers, investment in research and equipment, and public health activity accounted for the remaining 24 percent, or $1.0 trillion, of national health spending.

The portion of health spending by the government is growing