William_T._Bianco,_David_T._Canon]_American_Polit

598 Chapter 16Chapter 16 || Social PolicySocial Policy

Health care

Health care policy seemed as difficult to reform as Social Security. Every president

since Theodore Roosevelt who attempted comprehensive reform failed until President

Obama’s success in 2010 with the ACA. In order to understand the law, we have to

understand how health care is provided in the United States and the factors that

the ACA has been designed to address: the nation’s aging population, health care

costs that are rising faster than inflation, and the lack of health insurance among a

significant number of Americans before the implementation of the law. The United

States spends more on health care than any other nation in the world—$3.4 trillion,

or 17.2 percent of GDP, compared with 8.9 percent for other developed countries (for

example, Japan spends 10.7 percent, Germany 11.3 percent, Canada 10.4 percent, and

Italy 8.9 percent).^52 All these countries have government-funded universal health care;

thus, we spend almost 90 percent more than they do (in relative terms) but leave nearly

30 million people without coverage. This set up a two-tier system in which those who

had access to health care got some of the best care in the world and those without access

were much less likely to get the health care they need.

Medicare and Medicaid As Figure 16.6 shows, our current system combines

government spending (Medicare and Medicaid), private insurance, and out-of-pocket

DID YOU KNOW?

56.9 million

people received benefits from

Medicare in 2016.

Source: Centers for Medicare and

Medicaid Services

FIGURE

16.6

Program

administration and net

cost of health insurance

7.9%

Dental services

3.7%

Research and equipment

4.7%

Physician and

clinical services

22.7%

Retail sales of

prescription drugs

and medical products

13.2%

Nursing home,

home health, and

other residential care

12.9%

Government public

health activities

2.5%

Hospital care

32.4%

Funding Sources Spending

Private health

insurance

35.1%

Medicare

22.1%

Other public

programs

12.6%

Out of pocket

12.4%

Medicaid

17.8%

Note: Percentages shown may not add up to 100 percent because of rounding.

Source: Centers for Medicare and Medicaid Services, National Health Expenditures data, spending data from Table 2, funding sources from

Table 6, http://www.cms.gov (accessed 7/5/18).

The Health Care Dollar: Where It Comes from and Where

It Goes

Funding for our current health care system comes from a variety of sources and is spent on many types of care. In an effort to slow

the increases in health care costs, which areas should receive the most attention?

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