US: Health System Financing - World Health Systems Facts

Out-of-pocket expenditure as percentage of current health expenditure (CHE) (%), 2022: 11.1%

Source: Global Health Observatory. Out-of-pocket expenditure as percentage of current health expenditure (CHE) (%). Geneva: World Health Organization. Last accessed Jan. 23, 2025.

Domestic private health expenditure (PVT-D) as percentage of current health expenditure (CHE) (%), 2022: 44.83%

Source: Global Health Observatory. Domestic private health expenditure (PVT-D) as percentage of current health expenditure (CHE) (%). Geneva: World Health Organization. Last accessed Jan. 23, 2025.

Domestic general government health expenditure (GGHE-D) as percentage of current health expenditure (CHE) (%), 2022: 55.17%

Source: Global Health Observatory. Domestic general government health expenditure (GGHE-D) as percentage of current health expenditure (CHE) (%). Geneva: World Health Organization. Last accessed Jan. 23, 2025.

Domestic general government health expenditure (GGHE-D) as percentage of gross domestic product (GDP) (%), 2022: 9.1%

Source: Global Health Observatory. Domestic general government health expenditure (GGHE-D) as percentage of gross domestic product (GDP) (%). Geneva: World Health Organization. Last accessed Jan. 23, 2025.

“Private businesses, households, and governments finance health care in the US; they are the sponsors of private health insurance premiums, out-of-pocket spending, and government program expenditures (financed through dedicated taxes or general revenue). In 2023, state and local governments accounted for a higher share of spending than in 2022, whereas the federal government share was lower as COVID-19-related funding declined and federal Medicaid spending growth slowed. Nevertheless, of the $14,570 in per person health spending in 2023, the federal government accounted for the largest share, at 32 percent ($4,689 per person). Households paid for 27 percent ($3,942 per person), private businesses accounted for 18 percent ($2,677 per person), state and local governments another 16 percent ($2,279 per person), and other private revenues the remaining 7 percent ($983 per person) (exhibit 5).”

Source: Anne B. Martin, Micah Hartman, Benjamin Washington, Aaron Catlin, and The National Health Expenditure Accounts Team, National Health Expenditures In 2023: Faster Growth As Insurance Coverage And Utilization Increased, Health Affairs (2024), doi.org/10.1377/hlthaff.2024.01375.

“Among payers, the acceleration in overall health spending growth in 2023 was driven mostly by private health insurance spending,⁷ which increased 11.5 percent in 2023 compared with growth of 6.8 percent in 2022 (exhibit 3). Medicare spending also grew at a faster rate, increasing 8.1 percent in 2023, compared with growth of 6.4 percent in 2022. For both payers, this faster spending growth was attributable to hospital care services and retail prescription drugs (data not shown).⁸ For Medicaid, in contrast, growth in spending continued to be strong, but it slowed from 9.7 percent in 2022 to 7.9 percent in 2023 (exhibit 3). This deceleration was influenced by much slower growth in enrollment as the Medicaid continuous enrollment provision ended on March 31, 2023.⁹“

“In 2023, total federal government expenditures for health care ($1.6 trillion) increased 3.4 percent, following growth of 1.9 percent in 2022 (exhibit 5). Federal Medicare expenditures (a 30 percent share of federal government health care expenditures) increased 12.9 percent in 2023, following growth of 1.1 percent in 2022.¹² This faster growth was partly due to the initial impacts on federal Medicare spending of the Inflation Reduction Act, which lowered cost sharing for insulins and vaccines (increasing Medicare’s financial responsibility),¹³ as well as faster growth in spending for Medicare hospital care and physician and clinical services. Another contributor to federal health spending growth was an increase in Marketplace subsidies (a 6 percent share), which grew 25.5 percent in 2023—the third consecutive year that growth exceeded 16 percent.¹² These subsidies led to increased enrollment in Marketplace plans.⁵ The federal portion of Medicaid payments represented the largest component of federal government health expenditures (38 percent),¹² and these payments increased 3.6 percent in 2023, following growth of 10.9 percent in 2022 (exhibit 3). The slower growth is largely attributable to phasing down the federal medical assistance percentage (from April 2023 to January 2024) that had been increased by 6.2 percentage points during 2020–22 as part of the Families First Coronavirus Response Act of 2020.¹⁴

“Health care spending by households ($1.3 trillion) increased 6.8 percent in 2023 (exhibit 5), a slower rate of growth than the increase of 7.7 percent in 2022 but still faster than the average rate of 4.2 percent during 2016–19.¹² The largest share of household health care spending consisted of out-of-pocket expenditures (38 percent),¹² which increased 7.2 percent in 2023 after growth of 6.9 percent in 2022 (exhibit 3) as a result of faster spending growth for hospital care and physician and clinical services (data not shown). For Medicare and private health insurance, contributions by households experienced diverging trends. Medicare premiums and payroll taxes paid by individuals (accounting for a 27 percent share of household health spending) experienced slower growth of 4.0 percent in 2023, compared with growth of 11.8 percent in 2022.¹² In contrast, household contributions to employer-sponsored private health insurance premiums (a 26 percent share) increased 8.9 percent in 2023 after growth of 8.3 percent in 2022—the faster growth resulting, in part, from increased enrollment in private health insurance plans.¹²

“Health care spending by private businesses ($894.0 billion) grew 11.0 percent in 2023, a faster rate than the category’s growth of 6.8 percent in 2022 (exhibit 5). The largest share of private businesses’ health spending was composed of contributions to employer-sponsored private health insurance premiums (77 percent), which increased 13.0 percent in 2023 after growth of 6.7 percent in 2022.¹² This acceleration was, in part, due to increased private health insurance enrollment and an increase in the share of employer-sponsored private health insurance that is paid for by private businesses (from 71.4 percent in 2022 to 72.1 percent in 2023).¹⁵

“State and local government health spending ($761.3 billion) also exhibited faster growth, increasing 11.6 percent in 2023, compared with growth of 6.0 percent in 2022 (exhibit 5). The state portion of Medicaid payments constituted the largest portion of total state and local government health expenditures (37 percent) in 2023.¹² These payments grew 18.4 percent in that year, increasing at a faster rate than in 2022 (6.8 percent) (exhibit 3), and reflect the phasing out of the temporarily enhanced federal medical assistance percentage. Another factor in the overall acceleration was faster growth in state and local government contributions to employer-sponsored private health insurance premiums (a 28 percent share), which increased 9.0 percent in 2023, following growth of 4.4 percent in 2022.¹²“

Annual household out-of-pocket payment in current USD per capita, 2020: $1,157

Source: Global Health Expenditure Database. Health expenditure series. Geneva: World Health Organization. Last accessed May 13, 2023.

Table 18 - Political Economic Research Institute 2018 report on Medicare For All

“Overall then, as Table 18 shows, our bottom-line figure for all existing public funding sources available to finance Medicare for All is $1.88 trillion (rounded down from $1.884 trillion). This figure includes, again, 1) all available public insurance funds; 2) funds now provided for other public third-party payers; and 3) federal tax subsidies as well as health insurance spending on federal government employees.

“Given our estimate that the costs of providing universal coverage under Medicare for All would be $2.93 trillion in 2017, we can then conclude that, for the U.S. economy as of 2017, we would need to raise an additional $1.05 trillion in new taxes to fully fund Medicare for All. We show our simple derivation of this figure in Table 19.

“Of course, these new tax revenues would not constitute a net additional cost or spending burden on the U.S. economy. These funds would rather be serving to substitute for the loss of revenue into the U.S. health care system that presently come from existing private revenue sources— i.e. primarily private health insurance and out-of-pocket expenditures. These private revenue sources would no longer operate.”

Source: Pollin R, Heintz J, Arno P, Wicks-Lim J, Ash M. Economic analysis of Medicare for All. Research report. Political Economics Research Institute. 30 November 2018.

US: Health System Financing - Government, Private, Out-Of-Pocket, Current Health Expenditures - National Policies - World Health Systems Facts

World Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems and policies in the US and sixteen other nations.

Page last updated April 2, 2025 by Doug McVay, Editor.