2022 Edition — Health Care Costs 101
Federal Spending on COVID-19 Drives Growth
National health spending in 2020 increased 9.7% from 2019 to $4.1 trillion. The increase was largely driven by increases in federal spending during the COVID-19 pandemic. Excluding federal public health and other federal program spending, national expenditures increased just 1.9% in 2020 after an increase of 4.3 percent in 2019. A 2.2% reduction in GDP raised health care’s share of the economy to 19.7%, up from 17.6% in 2019. Health care spending averaged $12,530 per person, up from $11,462 in 2019.
Key findings about US health spending in 2020 include:
- US health spending increased by 9.7% in 2020, the largest annual increase since 2002 and double the 4.3% growth rate in 2019.
- Both out-of-pocket and private insurance spending declined in 2020, 3.7% and 1.2%, respectively.
- Public health spending (federal and state) in 2020 more than doubled (113%). Most of the increase occurred in federal spending.
- Health spending by the federal government increased by 36%.
- The federal government’s share of total health spending increased from 29% in 2019 to 36% in 2020.
- New federal health spending during the COVID-19 pandemic included:
- Medicaid spending increased 18.8%, from $387 billion in 2019 to $460 billion in 2020, which included an increase in the Federal Medical Assistance Percentage to states for Medicaid.
- Provider assistance payments, including $122 billion under the Provider Relief Fund and $53 billion under the Paycheck Protection Program.1
- Public health spending, including $112 billion for vaccine development, testing, stockpiles, and grants to states and $1.5 billion to the Centers for Disease Control and Prevention for testing surveillance and viral sequencing.2
This quick reference guide and the full report are available for download below. These materials are part of CHCF’s California Health Care Almanac, an online clearinghouse for key data and analyses describing the state’s health care landscape. See our entire collection of current and past editions of Health Care Costs 101.
- Micah Hartman et al., “National Health Care Spending in 2020: Growth Driven by Federal Spending in Response to the COVID-19 Pandemic,” Health Affairs 41, no. 1 (Jan. 2022): 13–25.
- Accounting for Federal COVID Expenditures in the National Health Expenditure Accounts, Centers for Medicare & Medicaid Services.