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Updated April 14, 2020
U.S. Health Care Coverage and Spending
In 2018, the United States had an estimated population of
nonmedical net costs, which include, but are not limited to,
322 million individuals. Most of those individuals had
taxes, net gains or losses to reserves, and profits.
private health insurance or received health care services
under a federal program (such as Medicare or Medicaid).
Most of this spending was for hospital care and physician
About 8.9% of the U.S. population was uninsured.
and professional services (Figure 1). Private health
insurance spending, as a percentage of all health
Individuals (including those who were uninsured), health
consumption expenditures, has increased by about 12
insurers, and federal and state governments spent
percentage points since 1960 (Figure 2). This growth is
approximately $3.5 trillion on various types of health
partially due to increases in enrollment and, when
consumption expenditures (HCE) in 2018, which accounted
considered alongside the implementation and expansions of
for 16.9% of the nation’s gross domestic product.
Medicare and Medicaid, corresponds with the drop in out-
of-pocket spending since 1960.
Table 1. Health Care Coverage, 2018
Medicare
Enrollment
Medicare is a federal health insurance program that pays for
(millions/percentage
covered health care services for most people aged 65 and
Source
of U.S. population)
older and for certain permanently disabled individuals
Insured
294 (91.1%)
under the age of 65.
Private health insurance – Group
178 (55.2%)
An estimated 57 million individuals (17.6% of the U.S.
Private health insurance – Non-group
43 (13.4%)
population) were enrolled in Medicare in 2018. The
program accounted for $750 billion (21.6% of overall
Medicare
57 (17.6%)
HCE); this share is about 10 percentage points higher than
Medicare’s percentage of HCE in 1970 (Figure 2). In 2018,
Medicaid/CHIP
66 (20.5%)
most of the spending was for hospital care and physician
Military - TRICARE
9 (2.7%)
and professional services (Figure 1).
Military - VA Care
7 (2.3%)
Figure 1. Health Consumption Expenditures by Type
Uninsured
29 (8.9%)
and Source, 2018
(in billions of dollars)
Source: U.S. Census Bureau, Table HIC-4_ACS. Health Insurance Coverage
Status and Type of Coverage by State-All Persons: 2008 to 2018, September
2019.
Notes: Italicized = does not add to total. Individuals may have more than
one type of coverage at a time (for example, Medicare and Medicaid).
Therefore, estimates by type of coverage are not mutually exclusive.
CHIP = The State Children’s Health Insurance Program. Medicaid/CHIP
coverage estimate also includes all means-tested public coverage, such as
state and locally financed public coverage.
Private Health Insurance
Private health insurance is the predominant source of health
insurance coverage in the United States. The private health
Source: Centers for Medicare and Medicaid Services, National Health
insurance market includes both the group market (largely
Expenditure Accounts—National Health Expenditures by Type of Expenditure
made up of employer-sponsored insurance) and the non-
and Program, December 2019.
group market (commonly referred to as the individual
Notes: All of the terms used in this figure are defined in the source
market, which includes plans directly purchased from an
document, except long-term services and supports, which is defined in the
insurer both on and off health insurance exchanges). In
text of this In Focus. DME = durable medical equipment. CHIP = The
2018, these markets covered an estimated 178 million
State Children’s Health Insurance Program.
individuals (55.2% of the U.S. population) and 43 million
individuals (13.4% of the U.S. population), respectively.
Medicaid/The State Children’s Health
Insurance Program (CHIP)
In 2018, private health insurance accounted for $1,243
Medicaid is a joint federal-state program that finances the
billion (35.8% of overall HCE). Private health insurance
delivery of primary and acute medical services, as well as
expenditures (Figure 1) include amounts paid by insuring
organizations to providers and all insuring organizations’
long-term services and supports, to a diverse low-income
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U.S. Health Care Coverage and Spending
population, including children, pregnant women, adults,
Out-of-Pocket Spending
individuals with disabilities, and people aged 65 and older.
Out-of-pocket spending (other than premiums) includes all
amounts paid by the privately insured and other insured
CHIP is a means-tested program that provides health
individuals for coinsurance, deductibles, and services not
coverage to targeted low-income children and pregnant
covered by insurance. It also includes any amounts paid by
women in families that have annual income above Medicaid
the uninsured for health care goods and services. Among all
eligibility levels but have no health insurance.
individuals, out-of-pocket spending totaled $376 billion
(10.8% of total HCE) in 2018.
Figure 2. Health Consumption Expenditures (HCE) by
Source as a Percentage of Total HCE, 1960-2018
The Uninsured
Approximately 29 million individuals (8.9% of the U.S.
population) were uninsured in 2018. The uninsured rate was
relatively stable from 2008 to 2013 before dropping 6
percentage points by 2016 (Figure 3). This drop in the
uninsured rate corresponds with increases in non-group
coverage and Medicaid/CHIP coverage, which are
associated with the implementation of various provisions of
the Affordable Care Act (ACA; P.L. 111-148, as amended),
such as the exchanges and premium tax credits and the
Medicaid expansion.
Source: Centers for Medicare and Medicaid Services, National Health
Expenditure Accounts—National Health Expenditures by Type of Service and
Figure 3. Health Insurance Coverage by Source as a
Source of Funds, CY1960-2018, December 2019.
Percentage of Total U.S. Population, 2008-2018
Note: CHIP = The State Children’s Health Insurance Program.
An estimated 66 million individuals (20.5% of the U.S.
population) received Medicaid or CHIP in 2018, and the
programs accounted for $616 billion (17.7% of overall
HCE). This spending is about 10 percentage points higher
than Medicaid/CHIP’s percentage of total HCE in 1970
(Figure 2). Furthermore, Medicaid spends the highest
percentage of expenditures on long-term services and
supports, which includes (1) other health, residential, and
personal care; (2) nursing care facilities and continuing care
retirement communities; and (3) home health care (Figure
Source: U.S. Census Bureau, Table HIC-4_ACS. Health Insurance Coverage
1). Long-term services and supports also includes some
Status and Type of Coverage by State-All Persons: 2008 to 2018, September
post-acute care (i.e., skilled care provided over a short term,
2019.
typically after a hospitalization).
Notes: Individuals may have more than one type of coverage at a time
Military
(for example, Medicare and Medicaid). Therefore, estimates by type of
coverage are not mutually exclusive. CHIP = The State Children’s Health
Health care services for military servicemembers, veterans,
Insurance Program. Medicaid/CHIP coverage estimate also includes all
and their dependents are provided by the Department of
means-tested public coverage, such as state and locally financed public
Defense, through programs such as TRICARE, and the
coverage.
Department of Veterans Affairs. In 2018, an estimated 9
million individuals (2.7% of the U.S. population) had
The cost of care for the uninsured population is accounted
TRICARE and 7 million (2.3% of the U.S. population)
for in multiple spending categories (Figure 1 and Figure
individuals had VA Care. Together, these departments
2). Payments made by uninsured individuals for health care
accounted for $120 billion (3.4%) of total HCE.
services are included in the out-of-pocket total. Any
Other Health Services
amounts received by providers that help to partially and/or
indirectly cover the cost of care for the uninsured are
Other health care spending covers services provided
accounted for in corresponding source totals (e.g., Medicare
through public and private programs not listed above,
and Medicaid disproportionate share hospital payments are
including worksite health care programs, philanthropic
included in program totals).
support, Indian Health Service activities, workers’
compensation, general assistance, the Maternal and Child
For more information about federal health programs, see
Health program, vocational rehabilitation, Substance Abuse
the CRS Health Care issue area page at http://www.crs.gov/
and Mental Health Services Administration grants, federal
iap/health-care.
and state public health activities, school health programs,
and other programs whose primary focus is the provision of
care or treatment of disease. Other health services
Ryan J. Rosso, Analyst in Health Care Financing
accounted for $370 billion (10.7% of total HCE) in 2018.
IF10830
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U.S. Health Care Coverage and Spending
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