Healthcare spending is a major challenge for the US economy. The U.S. health system is the world’s most expensive and faces challenges in providing affordable care, leading to financial stress and debt for many Americans.
These U.S. healthcare spending statistics help us understand the dimensions of this problem.
Key Takeaways
- The United States spent $4.1 trillion on healthcare in total in 2020, an increase of $500 million over the previous year.
- The US spends around $12,530 a year per person on healthcare.
- Canada spends $6,413 less per person each year than the US.
- People 55 and older account for 30% of the population but 56% of healthcare spending.
- Women spend $1770 more on healthcare per year than men do on average.
- On average, Americans spend $1,059 a year on prescription drugs alone.
- Insured individuals paid $7,739 on average for a single policy in 2021.
- The amount of medical debt in the US is estimated to be anywhere from $88 billion to $195 billion.
- 63% of people said they had to cut back on food and basic necessities to stay on top of their medical bills.
How Much Does the US Spend on Healthcare?
In 2020 the U.S spent a total of $4.1 trillion on health care, a $305 billion increase over 2019. The increase was largely driven by the COVID-19 Pandemic.[1]
For perspective, that’s about 19% of the US Gross Domestic Product (GDP) and more than 5 times the annual defense budget.
Average Cost of Healthcare per Person
The US spends around $12,530 a year per person on healthcare, the highest average cost of healthcare in the world. That figure is up from $10,242 in 2016.
To put the numbers in perspective, Canada spends $6,413 less per person than the US.[1]
How Much Does the US Spend on Healthcare Compared to Other Countries
The U.S.spends an average of $12,318 per person on healthcare every year. Germany falls a distant second with an average of $7,383 per person per year.[2]
Healthcare Spending by State, Age, and Gender
Per Capita Healthcare Spending by State
We were unable to determine the exact per capita healthcare expenditures per state. This is why we calculated the average healthcare spending per capita by state using the data on total personal healthcare spending. *Rolling drums* New York has the highest per-capita healthcare expenditure, with $14,007.[3]
Healthcare Spending by Age
The chart below shows the most recent data (2014) broken down by type sources of funding (private health insurance, Medicare, Medicaid, out-of-pocket, and all other payers and programs).
Statistics show that the 5-17 age group spends the least on healthcare, with an average of only $1,921 a year. The highest healthcare spending ($11,316) has been recorded for the age group 65+, which is expected: as we grow older, we require more care.[4]
Healthcare Spending by Gender
Data from 2014
Women spend on average $1770 more on healthcare than men, which could be due to the fact that women tend to go for regular checkups a lot more often than men. Women also have unique medical expenses, from giving birth to birth control and preventive care services.[4]
Where Does the Money Come From? Where Does It Go?
How Is Healthcare Financed
Most healthcare in the US is financed by private insurance companies, government programs like Medicare and Medicaid, and out-or-pocket expenses carried directly by the patient. Here’s how the balance gaming those payers has evolved. [5]
Who Pays For Healthcare?
A study by AMA shows that 27.9% of costs related to health care in 2020 were covered by private health insurance and 20.1% by Medicare.[6]✓
✓ Trusted source
AMA
The American Medical Association brings together more than 190 state and specialty medical societies as well as other important stakeholders.
Healthcare Spending By Type of Expenditure
Data show that people spend the most on physicians and clinical services, with $2,459 per person in 2020. This means an increase of $801 over the last ten years. Prescription drugs come second as the most expensive with $1,059 spent per capita in 2020.[1]
Cost Of Health Insurance
The net cost of health insurance has increased from $64 billion in 2000 to $259 billion in 2018. That’s a $194 billion increase over those 18 years. To put those numbers in perspective, Chile’s GDP is $252 billion.[7]
The average cost of insurance for single coverage grew from $6,435 in 2016 to $7,739 in 2021, with the cost of family coverage growing from $18,142 to $22,221.[7]
Who Pays for Employer-Provided Private Health Insurance?
The cost of employer-provided private health insurance is typically shared between the employer and the employee. The employer pays a portion of the cost as part of the employee’s compensation package. Here’s how the balance between employer and employee contributions breaks down.
Medical Debt Statistics
How Much Medical Debt Is There in the US?
The total amount of medical debt in the United States falls into the $88 billion (according to CFPB) to $195 billion range. Although this is a rather “generous” range, it is challenging to get an accurate figure, as many people use credit cards, loans, or other forms of financing to cover their medical costs.[8]✓
✓ Trusted source
CFPB
The Consumer Financial Protection Bureau is a United States federal organization in charge of financial consumer protection.
How Much Medical Debt Does the Average American Have?
Healthcare debt is a problem many Americans deal with, some of them finding themselves under challenging circumstances because of it, while others manage to stay on top of their bills. Wyoming has the highest average health care debt of all states, with $1,611, while Alaska comes second with $1,363. You might be wondering, why is health care debt so high in Alaska? Well, that’s because medical services cost a lot more than they cost in other states, considering accessibility to all medical services and procedures, costs of transportation for all medical supplies, and other factors.[9]
How Do People Tackle Medical Debt?
Health care services are quite costly in the U.S., and not all of the cost is covered by insurance. Many Americans, even those with insurance, fall into debt because of their high hospital bills.
A survey designed to reveal how Americans manage medical debt found that 63% of the people surveyed said they had to cut back on food and basic necessities to stay on top of their bills, while 48% used up all of their savings to pay off the debt. Unfortunately, some have been put in situations where they filed for bankruptcy, asked for charity aid, or lost their home.[9]
