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How is medical care financed in the United States?

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Polio vaccine — public health A health care worker giving a polio vaccine to a child in Katsina state, Nigeria, 2014.

Medical care in the United States is financed through a "mixed system" that relies on a combination of private insurance, government programs, and personal out-of-pocket payments.1

Private Financing

The majority of Americans with health coverage obtain it through employer-sponsored plans provided by private insurance companies. These plans are often organized as managed care organizations, such as health maintenance organizations (HMOs) or preferred provider organizations (PPOs), which use strategies like selective contracting and prenegotiated fees to control costs.1234

Government Financing

The U.S. government provides social insurance for specific segments of the population:13
* Medicare: Primarily for individuals aged 65 and older, financed through payroll taxes and general tax revenues.15
* Medicaid: A joint federal-state program for low-income individuals.15
* Special Programs: Includes coverage for military personnel and their families, such as TRICARE and the Veterans Health Administration.13

Reform and Regulation

The Patient Protection and Affordable Care Act (PPACA) significantly altered the landscape by expanding Medicaid eligibility, creating insurance exchanges, and providing subsidies to reduce premiums for low- and middle-income individuals. Despite these efforts, the U.S. remains the only high-income country without universal health coverage.6521