Publications / 2023 Edition — Health Care Costs 101

2023 Edition — Health Care Costs 101

While overall federal spending decreased, out-of-pocket spending increased.

National health care spending totaled $4.3 trillion in 2021, or $12,914 per person. In 2021, health care spending increased 2.7%, down sharply from the 10.3% increase in 2020. The slowdown in 2021 health spending was driven largely by declines in federal government spending related to the COVID-19 pandemic.

Health care accounted for 18.3% of GDP in 2021, down from 19.7% in 2020. The 2021 decline in health care’s share of gross domestic product (GDP) was due to slower growth in health care spending and the 10.7% increase in GDP.

Key findings about US health spending in 2021 include:

  • The federal government financed the largest share of health spending, accounting for one in three dollars of health spending. Households (27%), private business (17%), and state and local governments (15%) also shared the financing.
  • Overall federal health spending declined 3.5% in 2021, in contrast to the 36.8% growth experienced in 2020, the first year of the COVID-19 pandemic.
  • Spending on public health activities declined 21.3% to $188 billion, down from the 122.5% increase in 2020.
  • Other payers spending declined by 20.4%, mainly due to a decrease in COVID-19 supplemental funding programs to providers.
  • Public health insurance, for Medicare (21%), Medicaid (17%), and other public programs (4%), paid for 42% of health spending.
  • Out-of-pocket spending increased by 10.4%, a reversal from the 2.6% decline in 2020. Faster growth was due mainly to growth in out-of-pocket spending on dental services, durable medical equipment, other nondurable medical products.
  • The net cost of insurance declined 13.9%, a sharp contrast to its 26.0% increase in 2020.

The quick reference guide on national spending is available for download below. The full report will be published this summer.

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.