As Republicans look for ways to cut trillions from the budget, the focus inevitably turns to healthcare, one of the largest areas of spending for the federal government. As the old saying in Washington goes, the U.S. government is basically an insurance company with an army.
According to a new analysis of federal healthcare spending by KFF, a nonprofit focused on healthcare policy, the federal government spent $1.9 trillion directly on healthcare programs and services in the 2024 fiscal year.
Some highlights from the report:
* Healthcare spending collectively accounted for 27% of all federal outlays, the largest single component.
* Tax revenues lost to exemptions (known as tax expenditures) that are associated with healthcare, such as the exemptions for employee-sponsored health insurance, are significant, totaling $398 billion in 2024.
* About 80% of federal support for healthcare goes to programs that provide or subsidize health insurance coverage.
* Most healthcare spending is mandatory and includes “nearly all Medicare spending ($839 billion), federal spending on Medicaid and CHIP ($584 billion in federal funding), and the refundable portion of the health insurance premium tax credit for coverage through the ACA Marketplaces ($111 billion in federal funding).” Discretionary healthcare spending is much smaller and is dominated by veterans’ healthcare.
