US Taxpayers Footed $1.8 Trillion Health Care Bill in 2022
TL/DR –
In 2022, American taxpayers funded roughly $1.8 trillion in federal and state health care expenditures, accounting for about 41% of the nearly $4.5 trillion in total U.S. health care spending. This figure is significantly more than the combined health care expenditure of Germany, the U.K., Italy, Spain, Austria, and France, which offer universal health care coverage for their populace. Amy Finkelstein and Liran Einav argue in their book, “We’ve Got You Covered: Rebooting American Health Care,” that the U.S. could provide basic universal coverage without raising taxes since it already covers a significant proportion of health care costs.
US Health Care Expenditure Tops $1.8 Trillion in 2022
In 2022, American taxpayers covered at least $1.8 trillion in health care costs, accounting for 41% of the total $4.5 trillion spent on health care, as per a report by the Centers for Medicare and Medicaid Services. This includes spending from third-party programs and public health programs amounting to $600 billion.
Surprisingly, this outlay surpasses combined health care spending of Germany, the U.K., Italy, Spain, Austria, and France—countries providing universal health care to a total population of 335 million, similar to the U.S. population (331 million).
Health Care Spending: USA vs European Countries
Comparatively, Germany’s health care spending, encompassing direct public expenditure and compulsory insurance programs, was around $380 billion. France and the U.K. each spent roughly $300 billion, while Italy, Spain, and Austria spent $147 billion, $105 billion, and $43 billion respectively. These totals fall significantly short of U.S. expenditure, despite not providing universal coverage for its citizens.
Amy Finkelstein and Liran Einav’s Perspective on U.S. Health Care
Economists Amy Finkelstein and Liran Einav, authors of “We’ve Got You Covered: Rebooting American Health Care,” argue that U.S. taxpayers already finance universal basic coverage, but aren’t reaping the benefits. They suggest formalizing and funding this commitment upfront, as the latest CMS report indicates there’s no need to increase taxes for essential universal coverage.
A Shift to Universal Coverage Can Reduce Individual Costs
Per Finkelstein and Einav, providing universal coverage could reduce health care costs for individuals by eliminating the need for private health insurance. Based on recent CMS data, Americans spent an additional $471 billion in out-of-pocket expenses in 2022, aside from their health care coverage costs.
Health care spending increased by 4% in 2022 from 2021, constituting 17.3% of the gross domestic product (GDP). This increase is primarily due to the rise in Medicaid and private health insurance spending.
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