The U.S. health care system operates differently from many others in the world, characterized by high costs for the individual. In fact, it is the higher prices of medication, treatments, and hospital procedures that make the U.S. spend more on health care than any other developed country in the world, a 2019 Johns Hopkins report found.
Though expensive, the health care cost is to a large extent covered by the government. In 2019, 29.0% of all health-related spending in the U.S. was paid for by the federal government. Slightly less — 28.4% — came from households. State and local governments covered 16.1% of the total cost.
In 2018, the latest year for which state and local data is available, state governments spent $885 billion on health care, or $2,696 per person. Due to different budget priorities and needs, local government health care spending varies considerably by state.
To determine how much each state spends on your health, 24/7 Tempo reviewed the detailed health care expenditures by state governments provided by the U.S. Census Bureau’s 2018 Annual Survey of State and Local Finances. Per-capita health care spending ranges from less than $1,100 to more than $3,600.
States allocate between 17% and 39% of their total budgets to health care costs. The major categories of health spending at the state level include partial Medicaid coverage, state-run hospitals and university medical schools, and finally other health expenses and programs addressing needs such as community wellness, substance abuse, health inspection, and pollution control.
In every state, the largest portion of overall health care spending goes towards public welfare programs. These include Medicare and Medicaid, two government-funded health insurance programs that offer coverage to the elderly, the disabled, and people with low incomes.
On a global scale, greater health care spending appears to drive up overall life expectancy. In the United States, however, the relationship between spending and health outcomes appears to be more complicated. The COVID-19 pandemic lowered the life expectancy at birth in many states — here is where life expectancy was declining even before the pandemic.
To identify how much each state spends on your health, 24/7 Tempo reviewed the detailed health care expenditures by state governments provided by the U.S. Census Bureau’s 2018 Annual Survey of State and Local Finances.
State spending on health in 2018 consists of three components: each state’s public health expenditure, hospital expenditure, and welfare payments made directly to private vendors for medical assistance and hospital and health care.
State public health expenditure includes all public health activities except provision of hospital care. Hospital expenditure includes the construction and operation of hospitals by each state government and payments to privately operated hospitals.
Per capita spending was calculated using the total of each state’s expenditure in these areas and 2019 annual estimates from the U.S. Census Bureau’s 2019 American Community Survey (ACS). The shares of the population 65 and older, those living with a disability, and those with health insurance also came from the ACS and are for 2019
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