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Home ยป 91% of healthcare is government subsidized. Is your coverage safe?
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91% of healthcare is government subsidized. Is your coverage safe?

adminBy adminMarch 24, 2025No Comments7 Mins Read
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The US government subsidizes healthcare for 91% of American patients. And now I have the funds … more The risk of leaving.

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Most Americans believe that their health care is private and like that. Gallup Polling consistently shows that the majority prefer a system based on private insurance rather than government-run healthcare.

But here is an incredible reality. 91% of Americans receive government-subsidized healthcare.

Unless you're an uninsured or a small number of people who don't receive subsidies, government dollars are helping you pay your healthcare expenses – whether your insurance comes from an employer, a privately managed care organization, or an online marketplace.

Those grants (and your coverage) could be at risk as lawmakers face budgetary pressures. If the government supports healthcare spending on a scale, your healthcare spending can skyrocket.

Let's take a closer look at five ways the US government can fund healthcare. If you have health insurance, you almost certainly benefit from one of them:

Medicare, a government-run healthcare program for those over 65 years old, covers 67 million Americans at a cost of more than $1 trillion a year. Approximately half of enrollees are covered through traditional service pricing plans and the other half of privately managed Medicare Advantage plans. Medicaid and Tip provide health insurance to around 80 million low-income and disabled Americans, including tens of millions of children. 41 states are taking over Medicaid programs to privately managed care organizations, but costs continue to be public. Medicaid spends total $900 billion a year. The federal government will step in for the rest and pay 70%. The online healthcare market is aimed at Americans who are not offering medical coverage by employers or are self-employed. This Affordable Care Act program will provide federal grants to 92% of its 23 million enrollees. This helps reduce premium costs and often subsidize out-of-pocket expenses. The Congressional Budget Office predicts that a permanent extension of these grants, which are expected to end this year, will cost $383 billion over the next decade. Veterans and military families also benefit from government health care through Tricare and VA care. This is a program that covers approximately 16 million people with a total of $148 billion in the federal government. Employer-sponsored health insurance comes with important, but often overlooked government subsidies. For nearly 165 million American workers and their families, US businesses pay most of their health insurance premiums. However, these dollars are excluded from employee taxable income. The tax credit, which occurred during World War II and officially codified in the 1950s, subsidizes workers at approximately $300 billion per year in government costs. For a typical family of four, this leads to Take Hone Pay of around $8,000 a year.

With 91% of Americans receiving some form of government medical support, the idea that US healthcare is primarily “private” is an illusion.

Now, when you search for ways to curb the growing federal deficit, these five programs (funding healthcare for 9 to 10) all fall into a crosshair.

Financial Pressure: Why is no one's compensation really safe?

In February 2025, the federal deficit reached $300.07 billion, up 4% from the previous year, reaching nearly 2.5 times the January deficit. Total federal spending surged to $603 billion, up 6% year-on-year, pushing the fiscal year's deficit to $1.147 trillion.

As national debt grows, so does interest required to maintain it. The US is currently spending more on interest payments than Medicaid, and these costs are rapidly approaching Medicare levels.

12% of the federal budget is already heading towards debt payments, and the stock is expected to rise sharply. Many of the bonds used to fund existing debts were issued when interest rates were much lower. According to the Congressional Budget Office (CBO), these bonds will mature and refinance at higher rates today, so federal interest payments are expected to double within the next decade.

With deficit installations and rising borrowing costs, most economists agree that this trajectory is unsustainable. Lawmakers will ultimately need to curb spending, and healthcare subsidies will almost certainly be one of their first goals. Policy experts are forecasting Medicaid, where the House has already proposed a $880 billion cut over the next decade, with ACA subsidies for out-of-pocket costs likely to be the first in the chopping block. However, given the CBO's predictions, these cuts are not the last one.

Better Ways: 3 Solutions to Reduce Healthcare Costs Without Reducing

Reducing some or all of these healthcare subsidies may seem like the easiest way to reduce your deficit. In reality, simply shifting costs elsewhere makes healthcare more expensive for everyone and increases future government spending. Here's why:

Eliminating subsidies does not rule out the need for care. Under the Emergency Medical Labor Act (EMTALA), hospitals need to treat emergency patients regardless of their ability to pay. When millions lose insurance, they turn to more ERS for health care they can't afford. The cost of that uncompensated care will not go away. It passes to state government, hospital and individual insurance patients through higher taxes, inflated hospital bills and rising premiums. Lack of care increases long-term costs. Those who cannot afford a doctor's visit will skip preventive care, screening and early treatment. Manageable conditions such as hypertension and diabetes spiral into costly, life-threatening complications, including heart attacks, strokes and kidney failures, that ultimately increase government spending.

The solution does not reduce coverage. It corrects the root cause of high medical costs. There are three ways to achieve this:

1. Dealing with the obesity epidemic

Obesity is a leading driver of diabetes, heart disease, stroke and breast cancer, killing millions of Americans and spending hundreds of millions of millions of years on the US health system. Congress can take two immediate steps to reverse this crisis.

2. Use technology to enhance chronic disease management

In all other industries, the wide adoption of generative AI technology is already increasing quality and reducing costs. Healthcare can do the same by applying genai to manage chronic diseases more effectively. According to the Centers for Disease Control and Prevention, improved control of these lifelong conditions could reduce the frequency of heart attacks, strokes, kidney failures and cancer by up to 50%.

With rapid and reasonable FDA approval, generative AI and wearable monitors will revolutionize how these conditions are managed, providing real-time updates on patient health and identifying when drugs need adjustment. Instead of waiting several months for your next visit, patients with chronic illnesses will undergo continuous monitoring to prevent cost- and life-threatening complications. Rather than limiting the role of AI in healthcare, Congress can streamline the FDA's approval process and allocate NIH funds to accelerate these advances.

3. Reform the healthcare payment model

In today's service fee system, doctors and hospitals are paid based on the frequency of seeing patients for the same problem and the number of steps performed. This approach rewards the amount of care rather than the best and most effective treatment. A better alternative is a value model of value like a prisoner of war, where providers do their best financially when helping patients stay healthy. To encourage participation, Congress will need to fund pilot programs and create economic incentives for insurers, doctors and hospitals seeking to move into the system. This model encourages physicians to prioritize prevention and effective chronic disease control, ultimately improving overall health by tailoring financial incentives to long-term health status.

Time of change, advocacy is now

If Congress cuts healthcare subsidies this year, it's nearly impossible to restore them. Once reductions are effective, the financial and political pressures driving them will only intensify, and a reversal is unlikely.

The voices shaping this debate cannot come only from industry lobbyists. Elected officials should hear some or all of their health insurance from 91% of Americans who rely on government medical assistance. Now is the time to speak up.



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