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Outrageous US Healthcare Expenditure So Far Dwarfs 5 European Countries Combined

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By Augustine Mbam - - 5 Mins Read
A medical officer putting on a face mask designed like the American flag
Featured Image | Shutterstock

In 2022, American taxpayers had to cough up a whopping $1.8 trillion to cover both federal and state healthcare expenses. That's a lot, considering it makes up around 41% of the total healthcare spending in the United States.


To put things into perspective, the total healthcare spending in both public and private sectors amounts to a staggering $4.5 trillion!


These figures were revealed in the latest annual report published by the Centers for Medicare and Medicaid Services (CMS).


Adding to this substantial amount, third-party programs, often government-funded and public health initiatives, contributed an additional $600 billion towards healthcare expenditures.


Consequently, the United States government outspent some of the leading European nations, combining the healthcare budgets of Germany, the U.K., Italy, Spain, Austria, and France.


Thus, the U.S. government's spending exceeded the aggregate expenditure of these countries, even though their total population size is comparable to that of the United States.

US Healthcare Spending as a Percentage of GDP

According to the CMS, healthcare expenses made up 18.3% of the United States' gross domestic product (GDP) in 2021, which is less than the previous year's 19.7%.


Surgeons performing a critical medical procedure
Surgeons performing an operation | Olga Guryanova/Unsplash


The COVID-19 relief funds have been reduced because more money is now flowing into the economy, and the government has allocated fewer funds towards it.


But, healthcare costs in the United States are still higher than they were before the pandemic. This means the country's national debt worsens because of healthcare spending.

An Overview of Healthcare Expenditure in the United States

In nominal terms, U.S. healthcare spending reached a staggering $4.3 trillion in 2021, amounting to approximately $12,900 per person.


This represents a 3.0% increase compared to the previous year. The growth in healthcare spending can be attributed to the public and private sectors, as outlined below:

Private Health Insurance

Spending through private health insurance witnessed a significant rise of 5.8%, reaching $1.2 trillion in 2021. This surge was mainly driven by increased expenditure on medical goods and services, primarily caused by a growth in private health insurance enrollment and utilization.


Medicare spending skyrocketed to $901 billion in 2021, which is totally insane! That's an 8.4% increase from last year, all because of the rise in traditional fee-for-service and Medicare Advantage.


Medicaid spending went up 9.2% to a whopping $734 billion because more people signed up for it. The COVID-19 public health emergency caused a temporary expansion of Medicaid coverage, which led to a 22.3% growth in enrollment.

Out-of-pocket Spending

Out-of-pocket spending rose by 10.4% due to increased medical services and goods utilisation. This occurred after a decline was observed in 2020, which was attributed to the impact of the COVID-19 pandemic.

A Comparative Analysis

If we look at direct public spending and mandatory tax-funded insurance programs, it's pretty clear that Germany splashed out around $380 billion on healthcare last year.


France and the UK spent about $300 billion, Italy allocated $147 billion, Spain put in $105 billion, and Austria spent $43 billion.


The total healthcare expenditure of these countries combined is $1.2 trillion, roughly two-thirds of what the U.S. government spent.


Moreover, it's noteworthy that the United States doesn't offer its entire population the option to forego private insurance.