PHI 101: Who Pays for Health Insurance

We are already spending what a high-quality health system that covers everyone should cost—but aren't getting it.


  • The US spends twice as much on healthcare per person than every other advanced country, all of which cover all their residents.

  • Public money—your tax dollars—pays for about 60% of the $2 trillion annual US healthcare bill through federal and state governments.

  • Individuals and employers pay less than 40% of total US healthcare spending. 

Whether you have good insurance, bad insurance or no insurance, you are likely contributing to the cost of health insurance in America through public programs.

Federal and state government already play a major role in health care. Government funds help pay for people with low incomes (Medicaid), people over 65 and people with disabilities (Medicare) and kids (SCHIP), because they are considered “vulnerable” populations. Government funds also contribute towards health care for state and federal employees, and they subsidize state and local hospitals.

But, if you don’t qualify for a public program, you must also pay for your own private insurance—if you’re lucky—with help from your employer. In our $2 trillion health care system in 2006, more than 1/3 of total health care spending was financed by private health insurance.

Right now, private health insurance costs are going up 8 times faster than wages. Increasingly, employers are dropping health care benefits or shifting additional costs to their employees.

Private insurance costs are soaring and benefits are being cut. Insurers are reaping massive profits as they deny coverage and care, limit what they will pay for, and increasingly shift costs to you. In fact, many insurers are seeing rising profits as their member rolls drop. They make more money when they avoid insuring people with costly conditions. That could be any of us and the people we love. They cannot continue to game the system.

It doesn't have to be this way. We need government to set and enforce rules that work for us; we need health insurance that guarantees quality affordable health care to all.


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Half of U.S. Doctors Report Insurance Restricts Medications or Treatment Decisions

Fifty-eight percent of primary care doctors in the U.S. report their patients often have difficulty paying for medications and care, and half of U.S. doctors spend substantial time dealing with restrictions insurance companies place on their patientsí care, according to the 2009 Commonwealth Fund International Health Policy Survey.

Family Premiums for Employer-Sponsored Coverage Rose About 5%

Families saw their premiums for job-based health insurance rise to an average of $13,375 annually in 2009, with workers paying an average share of $3,515 and employers paying $9,860.

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