Relative to the size of the economy, the US spends much more on healthcare per person
compared to other wealthy countries. US healthcare spending per person in 2020 was $11,946
which was over $4,000 more than any other wealthy nation (Wager, Ortaliza, & Cox, 2022). In the
1970s about 6% of the US GDP went toward healthcare costs which was like other countries but in
the 1980s healthcare spending grew significantly faster and of course during the pandemic there
was also an increase in healthcare spending (Wager, Ortaliza, & Cox, 2022). In many arguments for
national healthcare, you may hear people say how cheap the healthcare is in other countries or
how little the cost may be per person; I think that a lot of individuals look at other countries like
Sweden and make a quick comparison to the health and wellness of the citizens, but fail to look at
the reality of the current US healthcare system and its costs.
Healthcare reform may be moving forward, but costs continue to rise and many Americans are
experiencing the challenges of trying to pay for those increased costs. I think that part of the
reason why individuals may not realize the extent of the incurred government costs is because of
how much insurance costs and how much out of pocket healthcare expenses are. In 2021, a KFF
poll showed that 46% of insured adults had difficulty affording their out-of-pocket costs and 27%
had difficulty affording their deductible (Kearney, Hamel, Stokes, & Brodie, 2021). When it costs
that much for individuals who are paying for health insurance, they are only seeing the expenses
that they can barely afford which makes it harder to believe that the government is spending so
much. The KFF’s poll also showed that 51% of adults delayed or went with certain medical care
due to the cost and 39% of adults most skipped dental care (Kearney, Hamel, Stokes, & Brodie,
2021). From previous discussions we already know that the choice to avoid seeking medical care
or to decline medical coverage can in the long run increase overall costs and the chances for
chronic conditions, but most people do not think so much about long term investments and
instead choose to live in the moment. Because so many individuals are foregoing medical, dental,
and vision services because of the increased costs surely, they would not be thinking about the
rising costs to the government to also cover some of these services.
I think there are several reasons why Americans are not aware of the large costs incurred by the
government. First, there are a lot of indirect costs that we see with taxes. In 2017, American
households spent $980 billion in healthcare costs, which is around $3,200 a person. However, this
is only one third of the nations $2.9 trillion in personal healthcare costs (Moeller, 2019). Turns out,
however, that federal and state governments paid out $1.7 trillion for healthcare mostly for
Medicare and Medicaid, which comes out in our taxes as Americans (Moeller, 2019). b Secondly,
many receive health insurance through their employers, which pay a brunt of the premiums for
their employees. However, a lot of companies use this as a trade-off for higher salaries. Lastly,
most Americans look at the cost they directly must spend rather than what the government is
doing in supplementing the costs. In 2006, it was reported in a survey that 65% of Americans said
they pay too much for health insurance and only 17% said they paid too little (Blendon, Brodie,
Benson, Altman & Buhr, 2006).
Truly, I have not really thought about government spending, but what I spend on healthcare for
my family. After researching this week on true government spending, I was astonished to see how
much the government does spend on healthcare. However, with what the government spends on
healthcare, insurance in our country is out of control with premiums and higher healthcare costs
which in turn increases the government spending. It is a vicious cycle. I do not have an answer on
how to fix this, but as health costs rise, insurance premiums will rise and so will the overall
spending from the government. With the passage of Obamacare and the American Rescue Plan
even more Americans are eligible for their health insurance to be subsidized by the government
(Davalon, 2022). This is not a problem as the cost of healthcare continues to rise in America. The
continuing rising cost is a problem though. People who fall between 100% and 150% of the FPL
now qualify for a zero-premium silver plan (Davalon, 2022). Premiums are also lower for those
that fall between 150% and 400% of the poverty line (Davalon, 2022). This is many Americans who
are receiving subsidies. In 2016 the cost of subsidies was $300 billion (CBO, 2016).
There is nothing wrong with the government subsidizing the cost for Americans who cannot afford
the premium. The problem is that the cost is so high in the first place. Why is the government not
regulating this market? In 2020, the healthcare sector spent more than $623 million on lobbying,
and from January through June 2021, it spent upward of $331 million on lobbying (Robertson,
2021). The insurance companies spending this much on lobbying shows why the government has
no interest in regulating the industry or the cost to the American people. There are no trustworthy
sources (that I can find) that give the amount in kickbacks received, in the pockets of the states
some of the politicians are from. This shows that the issue is not just one company but the field.
The government will continue to have to pay more along with increasing taxes and the deficit to
be able to adjust for the spending. This will lead to a collapse at some point, what will keep the
economy from collapsing due to this cost will be changes being made. This will either lead to a
complete national healthcare system or possibly no healthcare system - insurance wise, at all.
Despite having higher healthcare costs overall, the United States has one of the lowest life
expectancies of all developed countries. As of 2018, the United States sent approximately 16.9% of
the GDP on healthcare related costs (The Commonwealth Fund, 2020). Two years later, this
percentage rose to 19.7%; according to the National Health Expenditure Accounts, approximately
$4.1 trillion was spent on healthcare costs in 2020, which accounted for an astounding $12,530
per person (U.S. Centers for Medicare & Medicaid Services, 2021). By 2028, healthcare spending is
expected to grow at an annual rate of 5.4% and ultimately reach a staggering $6.2 trillion (U.S.
Centers for Medicare & Medicaid Services, 2021). As we have learned this term, the age of the
United States population continues to rise which is leading to increased utilization of Medicare
services for eligible citizens. In 2020, costs associated with Medicare accounted for approximately
20% of the National Health Expenditures and is expected to continue to increase as the age of the
population rises (U.S. Centers for Medicare & Medicaid Services, 2021). This can and will have
significant impacts on healthcare spending. According to CMS estimates, the population eligible for
Medicare will experience a 7.6% increase in growth through 2028. The average American likely
understands the burden that costs associated with healthcare play in the economy, however, they
are probably not fully unaware of the sheer magnitude of these numbers. Although there is a
significant disparity between healthcare costs among insured and uninsured individuals, both
groups can feel the burden of these costs to some extent. Approximately 46% of insured
Americans note that they struggle to afford out of pocket costs, additionally 27% of insured
Americans report difficulty affording their deductible (Kearney et al., 2021). Due to these costs,
many Americans may delay or forgo seeking the medical care that they require, which can lead to
higher costs long term. Not only is healthcare spending too high but there is certainly the need for
additional healthcare reform to help drive down healthcare costs overall. b
The U.S. government spent $4.1 trillion on healthcare in 2020, which was an increase of 9.7% from
the previous year (Centers for Medicare and Medicaid Services, 2021). As a percentage of GDP,
healthcare accounted for 19.7% of spending. In 2010, 72% of spending was on health insurance
(Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics
Group, 2012). This large leap in spending can be attributed to the pandemic where thousands of
Americans had to rely on healthcare and the government for assistance but it is also important to
note that healthcare has been increasing each year aside from the pandemic. This data shows the
startling reality of how much of a financial impact healthcare has on the government. One way the
government pays for these costs, specifically Medicare, is through taxes. While taxes are
something every person sees taken out of their checks, where the money goes afterwards is a
mystery to many people. If the knowledge is not pushed into the face of the public, they may not
seek that information.
What people really want to know is what is in it for me (WIIFM)? If something does not have a
direct impact on a person’s life, they will not pay attention or care. This could be one of the
reasons Americans do not realize how much the government pays for their healthcare. If their
insurance is paying for their appointments and treatments, they are happy. Even if they are not
happy because the insurance does not cover enough of the cost, they may not realize the
government’s role in their healthcare. People may not realize the government pays for a lot of
healthcare costs through reimbursement programs and without this knowledge put in front of
their face and told why it is important and how it affects them, they could go on living without
caring about the impact of the government paying enormous sums of money for healthcare.
Centers for Medicare and Medicaid Services. (2021). Historical. Retrieved from
https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/NationalHealthExpendData/NationalHealthAccountsHistorical
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challenges-with-health-care-costs/
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Higher Spending, Worse Outcomes? Retrieved from
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