Ask a Scholar: Who Pays for America's Health Care?

King Banaian

Dear Ask a Scholar,

I've read that 60% of all health care in this country is paid for by the government (and I'm assuming that means the federal government). If that number is correct, I'd like to know the distribution of those payments (e.g., Medicare, VA, health insurance tax credits to businesses and so forth) and how much of that money goes to private insurance companies. The ultimate question is: Are health insurance companies really free enterprise businesses, or are they just another pig at the federal handouts trough? Also, of the 40% not paid for by the federal government, how much of that amount is paid out-of-pocket by private citizens, businesses or whatever?

- Larry Stark, Metropolitan State University

Answered by King Banaian, professor and chairman of the Economics Department of St. Cloud State University. He holds a Ph.D. in economics from the Claremont Graduate School.  He has consulted at the central banks of Ukraine, Egypt and Macedonia and the ministries of finance of Indonesia, Macedonia and Armenia.  He is author of The Ukrainian Economy Since Independence (Edward Elgar, 1998), co-editor of The Design and Use of Political Economy Indicators (Palgrave, 2008) and more than thirty-five articles and book chapters discussing monetary policy and political economy. He directs the Center for Economic Education at SCSU. He was recently elected to the Minnesota House of Representatives. 

According to the Centers for Disease Control, 47% of spending on health care in 2008 was from public funds. 34.9% was federal spending, 12.4% state and local spending. See http://www.cdc.gov/nchs/data/hus/hus10.pdf at Table 122 for more. Private health insurance paid 35.4%, and out-of-pocket expenditures were 14.2%. (ibid, Table 126.) The remainder is paid by private funds, including charities. Medicare was 22.8%, Medicaid 16.2%, of all spending (ibid.). The connection between health insurance companies and the federal government is complex. Insurance company reimbursement rates are dependent on rates paid by Medicare and Medicaid. All states require many services to be included in health insurance policies. It's hard to talk about one market for health insurance -- there are really 51 of them.

* * *

About “Ask a Scholar”

Have a question Wikipedia can’t answer? We’ll match your question to a scholar with an answer. 

Questions submitted to “Ask a Scholar” should call for educated judgment rather than facts that can be found easily with an internet search. We especially welcome questions that provide professors the occasion to draw erudite distinctions and incorporate mention of matters you had no idea were connected to the topic at hand. Simply email NAS or submit questions via Intellectual Takeout's Ask the Professor feature. We'll field your question to a scholar and get back to you with the answer as soon as possible.  

  • Share

Most Commented

October 31, 2023

1.

University of Washington Violated Non-Discrimination Policy, Internal Report Finds

A faculty hiring committee at the University of Washington “inappropriately considered candidates’ races when determining the order of offers,” provided “disparate op......

January 24, 2024

2.

After Claudine

The idea has caught on that the radical left overplayed its hand in DEI and is now vulnerable to those of us who seek major reforms. This is not, however, the first time that the a......

December 9, 2023

3.

The Presidents and Academic Freedom

What are the boundaries of “free speech?” They are pretty much the same as the boundaries of civilization. Savages need not apply....

Most Read

May 15, 2015

1.

Where Did We Get the Idea That Only White People Can Be Racist?

A look at the double standard that has arisen regarding racism, illustrated recently by the reaction to a black professor's biased comments on Twitter....

October 12, 2010

2.

Ask a Scholar: What is the True Definition of Latino?

What does it mean to be Latino? Are only Latin American people Latino, or does the term apply to anyone whose language derived from Latin?...

September 21, 2010

3.

Ask a Scholar: What Does YHWH Elohim Mean?

A reader asks, "If Elohim refers to multiple 'gods,' then Yhwh Elohim really means Lord of Gods...the one of many, right?" A Hebrew expert answers....