The National Health Expenditure Accounts (NHEA) measures the annual U.S.
expenditures for health care goods and services, public health activities,
government administration, net cost of health insurance, and health care
investments. The U.S. saw a 9.7 percent increase in health care spending in
2020, reaching a total of $4.1 trillion. This equates to $12,530 US dollars per a
person (cms.gov). As the U.S. continues to grow and the number of uninsured
Americans increases the cost to the federal government will also continue to
rise exponentially. The government spends roughly $2 trillion which is directly
or indirectly financed by the federal government. This means nearly 8 percent
of the economy budget goes towards health care. By 2028 this is projected to
increase to $2.9 trillion or 9.7 percent of the economy (Health Care, 2018).
The biggest issue is the education regarding the governments impact on health
care and the average American not understanding the areas which the
government incurs cost. Americans are focused on themselves and their family
but tend to pay less attention to the government. The government incurs cost
related to tax preferences such as tax exclusion for employer-sponsored health
insurance, Medicaid/CHIP, Medicare, and other spending. Medicare spending
totaled $829.5 billion in 2020 or 20 percent of the total health care spending.
While Medicaid spending increased to $671.2 billion (cms.gov). Those
individuals that can “opt in” to health insurance may not understand how much
the government contributes to health care cost. As more Americans become
eligible for Medicare this is going to continue to increase the cost which the
government spends on health care.
Overall, health spending will continue to become a larger share of the
government’s overall budget and drive the growth in debt projected in the
future. A top initiative and goal for the federal government is to control health
spending to get the federal debt under control.
Thanks!
Charles (CJ) Barden
References
American Health Care: Health spending and the Federal Budget. Committee for a
Responsible Federal Budget. (2018, May 16). Retrieved February 9, 2022, from
https://www.crfb.org/papers/american-health-care-health-spending-and-federal-
budget)
Historical. CMS. (n.d.). Retrieved February 9, 2022, from)https://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-Reports/
NationalHealthExpendData/NationalHealthAccountsHistorical
)
Press Release National Health Spending in 2020 increases due to impact of COVID-19
pandemic. CMS. (n.d.). Retrieved February 9, 2022, from
https://www.cms.gov/newsroom/press-releases/national-health-spending-2020-
increases-due-impact-covid-19-pandemic)
