Since the early 1960s, government has taken control of an ever-increasing share of health care consumption. (Health care consumption is spending attributable to individual patients, as opposed to spending on public health or research and development). Programs controlled by government made up only about one fifth of health care consumption in the early 1960s. That share has climbed consistently since then, until it crossed the 50 percent threshold in 2020.
This increase in government control over individuals’ access to health care is due to both more programs and more spending on existing programs. In 1965, created Medicare for seniors and Medicaid for certainly categories of the poor, These two programs caused government’s share of health spending to spike up to about one third by the late 1960s.
Over the years, Congress increased eligibility for both programs. In 1972, Congress expanded Medicare to include people with disabilities and people with End-Stage Renal Disease (ESRD) requiring dialysis or kidney transplantation. In 2003, Congress added a prescription drug benefit (Part D) to Medicare.
Medicaid was originally available only to those receiving Aid to Families with Dependent Children (AFDC) a cash welfare program. Nevertheless, an individual also had to be a child (or the parent or adult caretaker of an eligible child), an aged adult, or disabled. In 1997, Congress established the Children’s Health Insurance Program, which also subsidized states’ medical welfare programs. The 2010 Affordable Care Act expanded eligibility for Medicaid to able-bodied, working-age, and generally childless adults.
Further, government runs its own health systems in agencies including the Department of Defense, Veterans Affairs, and the Indian Health Service.
Overwhelming in size and complexity, these programs are now bigger spenders than all privately sponsored health care in the United States.
