NCPA - National Center for Policy Analysis


December 5, 2006

While the administration may oppose government-run health care in principle, the government's role in the vast health industry has been expanding.  By various measures, the United States is about halfway toward a system in which the government and taxpayers fully fund health care.  And trends are pushing the government to become more involved each year, say columnist Daniel Gross.


  • Out of a total population of about 300 million, 35.6 million elderly Americans were on Medicare in 2005.
  • Of the working-age population, which reached 257.8 million in 2005, some 45.5 million were covered by Medicare, Medicaid or military health programs, according to the Employee Benefits Research Institute.


  • An additional 18.2 million workers had health insurance through jobs in the public sector, which includes state, federal and local governments, public schools and state universities, according to Paul Fronstin, director of the institute's health research and education program.
  • Millions of those workers' dependents are covered as well; even if those dependents are not included in the tally, taxpayers paid the bill for almost two-fifths of all Americans with insurance in 2005.

Thomas M. Selden, an economist at the federal Agency for Healthcare Research and Quality, estimates that the tax subsidy for employment-related coverage at $208.6 billion in 2006, or 35.4 percent of the amount spent on premiums.

Viewed strictly in terms of dollars and cents, the government already accounts for more than half of the nation's health care spending.  Mining data from the National Health Expenditures Accounts, Selden found that public expenditures on health care -- Medicare, Medicaid, military health care and federal employee benefits -- accounted for $888 billion of the $1.96 trillion spent on health care in 2004.  Adding in the aforementioned subsidies, and premiums paid for public-sector employees, the total comes to $1.2 trillion, or 61 percent.

Source: Daniel Gross, "National Health Care? We're Halfway There," New York Times, December 3, 2006.

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