“In 2020 the federal government and households accounted for the largest shares of national health spending (36 percent and 26 percent, respectively), followed by private businesses (17 percent), state and local governments (14 percent), and other private revenues (7 percent). Most of the growth in overall national health expenditures in 2020 was a result of increased spending by the federal government, as there were declines in spending by private businesses, state and local governments, and other private revenues and slow growth in spending by households (exhibit 2).

“Health care expenditures that were financed by the federal government increased rapidly, at 36.0 percent in 2020 (exhibit 2). Growth was driven mainly by spending for the Provider Relief Fund and Paycheck Protection Program loans, increased spending for federal public health activity, and growth in the federal portion of Medicaid payments (a 31 percent share of federal government expenditures) (data not shown). Growth in federal Medicaid payments resulted from the Families First Coronavirus Response Act of 2020 and led to a 6.2-percentage-point increase in the federal medical assistance percentage.⁹

Source: Hartman M, Martin AB, Washington B, Catlin A, The National Health Expenditure Accounts Team. National Health Care Spending In 2020: Growth Driven By Federal Spending In Response To The COVID-19 Pandemic [published online ahead of print, 2021 Dec 15]. Health Aff (Millwood). 2021;101377hlthaff202101763. doi:10.1377/hlthaff.2021.01763

“Households experienced slower health care expenditure growth in 2020, increasing 1.1 percent after growth of 4.4 percent in 2019 (exhibit 2). Out-of-pocket spending (a 36 percent share of household expenditures) and households’ contributions to employer-sponsored private health insurance premiums (a 27 percent share) were the largest contributors to the deceleration (data not shown). Out-of-pocket spending declined 3.7 percent in 2020 after growing 4.4 percent in 2019, largely attributable to reductions in the use of dental services, hospital care, physician and clinical services, and retail prescription drugs (exhibit 3). In addition, households’ contributions to employer-sponsored insurance premiums increased 3.8 percent after growth of 5.5 percent in 2019 (data not shown). The slowdown was driven largely by a decline in enrollment in employer-sponsored insurance.”

Source: Hartman M, Martin AB, Washington B, Catlin A, The National Health Expenditure Accounts Team. National Health Care Spending In 2020: Growth Driven By Federal Spending In Response To The COVID-19 Pandemic [published online ahead of print, 2021 Dec 15]. Health Aff (Millwood). 2021;101377hlthaff202101763. doi:10.1377/hlthaff.2021.01763

“Health care expenditures by private businesses declined 3.1 percent in 2020 after increasing 3.8 percent in 2019 (exhibit 2). The largest share of private businesses’ health spending was contributions to employer-sponsored private health insurance premiums (a 76 percent share of private business spending), which declined 3.6 percent in 2020 after a 4.1 percent increase in 2019 (data not shown). This reflects a decline in enrollment as well as a reduction in spending by self-insured employers resulting from declines in the use of health care goods and services by their employees.”

Source: Hartman M, Martin AB, Washington B, Catlin A, The National Health Expenditure Accounts Team. National Health Care Spending In 2020: Growth Driven By Federal Spending In Response To The COVID-19 Pandemic [published online ahead of print, 2021 Dec 15]. Health Aff (Millwood). 2021;101377hlthaff202101763. doi:10.1377/hlthaff.2021.01763

“Health care expenditures financed by state and local governments decreased 3.1 percent in 2020 after growth of 1.7 percent in 2019 (exhibit 2). The decrease was driven by a 7.0 percent decline (exhibit 3) in state and local Medicaid expenditures (representing a 36 percent share of state and local spending; data not shown). This expenditure decline occurred as the federal government’s share of expenditures for Medicaid increased to help ease the financial burden experienced by state and local governments as a result of the pandemic.”

Source: Hartman M, Martin AB, Washington B, Catlin A, The National Health Expenditure Accounts Team. National Health Care Spending In 2020: Growth Driven By Federal Spending In Response To The COVID-19 Pandemic [published online ahead of print, 2021 Dec 15]. Health Aff (Millwood). 2021;101377hlthaff202101763. doi:10.1377/hlthaff.2021.01763

“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. 

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

Page last updated Sept. 13, 2022 by Doug McVay, Editor.