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There are two major sources of health care spending in the United States today.
The first of these sources is the government. The government provides health care for a large number of people. The biggest program through which the government does this is the Medicare program. This program provides care to all people over 65 years of age.
The second source is the private sector. For the most part, this means business firms. Many firms offer health insurance to their employees as a fringe benefit. The company pays some portion of the premiums for the insurance and the employee pays the rest. The employer’s part of this is essentially a tax-free portion of the compensation that the employee gets.
Most health care spending, then, is funded either by the government or by private sector employers.
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