![]() ![]() Spending on hospital care services is the largest source of payment by private insurance programs. Among people under age 65, 176.1 million, or 65 percent, were covered by private health insurance in 2021. In 2020, private insurance programs covered 217 million people, which was almost twice as many Americans covered by public programs that year. Private insurance includes employment-based insurance plans as well as plans directly purchased from the marketplace. Federal, state, and local governments also incurred healthcare costs through public health programs, including relief programs established or enhanced in response to COVID-19. Altogether, they accounted for about $172 billion, or about 4 percent, of total national health consumption in 2021. Other government insurance programs include the Children’s Health Insurance Program, as well as healthcare provided by the Department of Defense and the Department of Veterans Affairs. In the past 20 years, such spending has more than tripled from about $41 billion to $154 billion. Overall, the growth in Medicaid payments is being driven by spending for dental and other health, residential, and personal care expenditures. Medicaid spending for hospital care has been the largest portion of total payments for the program, making up roughly 35 percent of total spending on average, and is projected to stay relatively stable. Medicaid programs are required by law to cover hospital and physician care, but states may also choose to cover other services such as physical therapy and dental care. About 77 million Americans, including children below the poverty level, nursing home residents, and non-elderly adults with disabilities, received health insurance through the program in 2020. Medicaid is a joint federal-state insurance program targeting lower-income Americans. Over the last two decades, spending on prescription drugs grew from less than $2 billion in 2000 to $120 billion in 2021. ![]() However, hospital care has been declining as a share of Medicare spending since a prescription drug benefit became part of the program in 2006. Such high levels of spending on hospital care is not surprising, as hospitalizations are associated with high-cost health episodes. The largest component of Medicare spending is on hospital care services, which accounted for nearly 40 percent, or $351 billion, of spending in 2021. In 2021, about 64 million Americans received health insurance through the program. Medicare is a federal program that provides health insurance to people who are age 65 or older, blind, or disabled. Below is a description of the composition of spending by type of program. For example, Medicare does not allow coverage for hearing aids or dentures. Payments differ across programs because of various factors, such as the type of services rendered, the population enrolled in each type of program, and certain provisions of law that limit payment for particular goods. TWEET THIS How Do Payments Differ Across Programs? The amounts paid for particular services vary across insurance programs and have changed over time. When viewed individually, private insurance programs were the largest single source of funding for healthcare expenditures in 2021, followed by Medicare (23 percent) and Medicaid (18 percent).
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