American taxpayers footed the bill for at least $1.8 trillion in federal and state health care expenditures in 2022 — about 41% of the nearly $4.5 trillion in both public and private health care spending the U.S. recorded last year, according to the annual report released last week by the Centers for Medicare and Medicaid Services.
On top of that $1.8 trillion, third-party programs, which are often government-funded, and public health programs accounted for another $600 billion in spending.
This means the U.S. government spent more on health care last year than the governments of Germany, the U.K., Italy, Spain, Austria, and France combined spent to provide universal health care coverage to the whole of their population (335 million in total), which is comparable in size to the U.S. population of 331 million.
Between direct public spending and compulsory, tax-driven insurance programs, Germany spent about $380 billion in health care in 2022; France spent around $300 billion, and so did the U.K.; Italy, $147 billion; Spain, $105 billion; and Austria, $43 billion. The total, $1.2 trillion, is about two-thirds of what the U.S. government spent without offering all of its citizens the option of forgoing private insurance.
This isn’t an aberration. The fact that, for many years, more taxpayer dollars have gone to health care in the U.S. than in countries where the health system is actually meant to be taxpayer-funded is central to the argument made by economists Amy Finkelstein and Liran Einav in their recent book, “We’ve Got You Covered: Rebooting American Health Care.”
“We’re already paying as taxpayers for universal basic automatic coverage, we’re just not getting it,” Finkelstein said at the STAT Summit this past October. “We might as well formalize and fund that commitment upfront.” The numbers in this CMS report illustrate their point: The U.S. would not need to raise taxes in order to provide basic universal coverage, since it’s already responsible for picking up a relative majority of the expenses.
Offering universal coverage would cut health care costs for individuals too, according to Finkelstein and Einav. That’s because people would have the choice not to purchase additional private health insurance, thereby avoiding contributions that get deducted from their paychecks as well as out-of-pocket charges. According to the latest CMS data, Americans spent $471 billion on out-of-pocket health expenses in 2022, on top of whatever they were already paying for health care coverage.
Overall, health care spending grew 4% in 2022 from the previous year, accounting for 17.3% of gross domestic product. The increase was largely driven by growth in Medicaid and private health insurance spending.