The U.S. health care system is certainly unique, distinguished from that of other western countries by its high costs and the important role it assigns to private insurers.

But a new study shows that there is at least one major similarity between the U.S. system and the largely socialized alternatives elsewhere: Most of it is paid for by the government.

A study published in the American Journal of Public Health found that 64.3 percent of health care expenditures in the U.S. in 2013 were paid for by federal, state and local governments. That is up from 1999, when taxpayers were picking up 59.8 percent of the tab.

The Patient Protection and Affordable Care Act wasn’t implemented until the end of 2013, so the assessment of public health spending may not take into account some of the changes brought on by the landmark health law.

The study, authored by David Himmelstein and Steffie Woolhandler of the City University of New York School of Public health, projects that taxpayers will be funding 67.1 percent of the nation’s health care costs by 2024.

Himmelstein told MedPage that most of the recent increase in government spending is attributed to hikes in Medicare spending. As baby boomers enter retirement, the Medicare rolls are larger than ever before.

“The rest pretty much stayed the same,” he said in an interview. “We expected over the next decade that Medicaid was going to be the piece that goes up, but in fact the thing going up was the Medicare program."

Much of the “public spending” that the researchers describe in fact refers to tax exemptions on private health plans. Because health plans are a form of compensation that are generally tax-exempt, they represent a major loss of government revenue.

While PPACA sought to subject the most generous health plans to a hefty excise tax, dubbed the “Cadillac Tax,” Congress voted to suspend that provision of the bill for at least two years in December.

Instant Insights /

Taxpayers foot 64% of U.S. health care bill

More From HR Executive

Related Stories

Recommended For You