US Healthcare Spending Growth Per Person

Surprisingly, healthcare expenditures per person have been rising faster in private insurance than in government programs such as Medicare and Medicaid.

Private insurance expenditures per person have grown at 4.8% a year, while Medicare and Medicaid spending have grown 4.4% and 2.2% respectively. Medicaid spending per person had been relatively stagnant for the past two decades until Medicaid rolls were increased during the COVID pandemic.

If spend-per-person isn’t driving government expenditures on healthcare higher than other forms of spending, then that leaves one other culprit: the number of people relying on government assistance for healthcare.

The key thing to notice on this chart is that people on Medicare and Medicaid costs 3x and 2x more than people on private insurance. This population is effectively uninsurable using a person’s income, so they end up on the government balance sheet.