Health care costs in the United States generally grow faster than inflation. The U.S. far exceeds other large and wealthy nations in per capita health spending, and health care represents a much larger share of the economy in the U.S. than in peer nations. Despite substantial spending, the U.S. health system grapples with disparities and gaps in coverage. Elevated health care expenditure in the U.S. does not consistently translate into superior health outcomes. Rising health care costs instead contribute to Americans facing difficulties affording medical care and drugs, even among those with insurance.

Many people are familiar with the high and rising cost of health care in the United States from seeing how much they spend on their own health insurance premiums and out-of-pocket costs. In addition to these very visible health costs, there are also tax dollars that go to fund public programs and the amounts employers spend toward their employees’ health insurance premiums. Total national health expenditures include spending by both public programs and private health plans, as well as out-of-pocket health spending. Total health expenditures represent the amount spent on health care (such as doctor visits, hospital stays, and prescription drugs) and related activities (such as insurer overhead and profits, health research and infrastructure, and public health).

Total Health Spending Reached $4.9 Trillion in 2022

Health spending in the U.S. has risen sharply over the last several decades. The official data on national health expenditures from the Centers for Medicare and Medicaid Services (CMS) show health spending totaled $74.1 billion in 1970. By 2000, health expenditures had reached about $1.4 trillion, and in 2023 the amount spent on health had more than tripled to $4.9 trillion. In the first year of the COVID-19 pandemic, health spending accelerated by 10.4% from 2019 to 2020, even as the use of health care dropped, driven largely by public health spending and financial relief provided to health care providers. Most recently, health spending grew 7.5% from 2022 to 2023, faster than the previous year’s 4.6% increase from 2021 to 2022. Health spending is expected to continue to grow at a similar pace for the foreseeable future.

In the chart above, spending is shown in terms of both nominal dollar values (not inflation-adjusted) and constant 2023 dollars (inflation-adjusted based on the personal consumption expenditures, or PCE, index). Inflation in the health sector increased slightly faster than across the general economy in 2023.

Currently, health care represents about 18% of the U.S. economy (measured as a share of gross domestic product, or GDP). In other words, almost 1 out of every 5 dollars spent in the U.S. goes toward health care. Back in 1960, health spending represented just 5% of GDP, meaning 1 in every 20 dollars in the U.S. economy was spent on health care. 

Out-of-pocket costs have also risen over time. Out-of-pocket costs represent the amount of money spent by individuals on health care that is not paid for by a health insurance plan or public program like Medicare or Medicaid. This includes cost-sharing, the most common forms of which are deductibles (an amount that must be paid before most services are covered by the plan), copayments (fixed dollar amounts), and coinsurance (a percentage of the charge for services). (i.e., copays, deductibles, coinsurance), as well as health spending by uninsured people or spending by insured people for care that is not covered at all by health insurance. Out-of-pocket spending does not include the amount spent on a person’s monthly health insurance premium.

Out-of-pocket spending per person was $115 in 1970 (or, adjusted for inflation, $703). By 2023, out-of-pocket spending had reached $1,514 per person. Despite this rise in out-of-pocket spending, health insurance now covers a larger share of total health spending (73%) than it did in 1970 (27%), in part because more people have gained coverage, especially public coverage, but also because health insurance spending per enrollee has grown.

Over the last several decades, health spending has been driven higher by a number of factors, including but not limited to an aging population, rising rates of chronic conditions, advancements in medicine and new technologies, higher prices, and expansions of health insurance coverage. While there are always differences across countries, many of these factors driving health costs upward in the U.S. are also driving health costs growth in peer nations. For example, while the U.S. population is indeed aging and that is driving health costs up, many large and wealthy nations have even more rapidly aging populations.

Other factors may explain the United States’ relatively high health spending compared to its peers. The U.S. health system is fragmented, with many private and public payers, and with regulation of these payers split between states and the federal government. However, these features are not entirely unique to the U.S., either. Indeed, some other countries with much lower health spending have multiple private payers or differences in public programs across states or provinces.  The U.S. is also not alone in having a mainly fee-for-service payment system.

The U.S. health insurance system is largely voluntary, whereas peer countries’ health systems are almost entirely compulsory. Additionally, the U.S. federal and state governments have generally done less to directly regulate or negotiate prices paid for medical services or prescription drugs than have governments of similarly large and wealthy nations. The U.S. often pays higher prices for the same brand-name prescription drugs, hospital procedures, and physician care than similarly large and wealthy countries do.

There are other factors, largely outside the control of the health system that are also likely at play, such as socioeconomic conditions (like income inequality and other social determinants of health), and differences in so-called lifestyle factors (like diet, drug use, or physical activity) that could contribute both to higher spending and worse outcomes.

Breaking total national health spending into its components can reveal the major drivers of health costs and where cost containment efforts could be most effective. The charts below show various ways of examining the key contributors to health spending. For example, the National Health Expenditure Accounts show trends in how health spending varies by type of service (e.g., hospital care vs. retail prescription drugs) or by source of funds (e.g., private health plans vs. public programs). An alternative and relatively new approach to understanding health spending is to break out total health spending into the share that goes to treat certain diseases (e.g., heart disease, cancer). Finally, health spending can also be better understood by looking at trends in prices (e.g., the dollar amount for a hospital stay) and utilization (e.g., the number of hospital stays). 

Hospital and Physician Services Represent Half of Total Health Spending

Most health spending in the U.S. and in peer countries is on hospital and physician care, followed by prescription drugs. In the U.S., hospital spending represented close to a third (31.2%) of overall health spending in 2023, and physicians/clinics represented 20.1% of total spending. In comparison to other large and wealthy countries, the U.S.’s higher spending on inpatient and outpatient care explains the vast majority of higher spending on health care overall.

Spending Has Grown for Hospitals, Physicians, and Drugs

During the 1970s, growth in hospital expenditures outpaced other services, while prescriptions and physician and clinic services saw faster spending growth during the 1980s and 1990s. From 2020 to 2023, retail prescription drugs experienced the fastest growth in spending at 8.6%, following 3.3% average annual growth from 2010 to 2020. Average spending growth for hospitals and physicians/clinics between 2020 and 2022 was 6.2% and 6.3%, respectively.

On a Per-Enrollee Basis, Private Insurance Spending Has Typically Grown Much Faster Than Medicare and Medicaid Spending

Per enrollee spending by private insurance grew by 80.4% from 2008 to 2023 – much faster than both Medicare and Medicaid spending growth per enrollee (50.3% and 30.3%, respectively). Private insurance often pays higher prices for health care compared to prices paid by Medicare and Medicaid.

Per enrollee spending by Medicaid rose by 7.9% in 2023 from the previous year, and also continued to increase in private insurance and Medicare (5.9% and 7.1% respectively). Medicare and private insurance per-enrollee spending continued to grow faster between 2021 and 2023 after slower growth in 2020. Medicaid per-enrollee spending had previously declined in 2021 as total enrollment grew, particularly among children and non-elderly adults, who generally have lower per-enrollee spending.

A Substantial Share of Health Spending Goes Toward the Treatment of Circulatory and Musculoskeletal Conditions

An alternative way of examining the components of health spending is to use the Bureau of Economic Analysis (BEA)’s Health Care Satellite Account, which estimates spending and price growth by disease category (e.g., cancer, infectious disease). This approach differs from the official categorization of health spending by service type (e.g., provider services). Essentially, the new satellite account redefines the “commodity” in healthcare as the treatment for specific diseases, rather than a hospital stay or a physician visit. BEA researchers found that the largest categories of medical services spending include the treatment of circulatory diseases (10.4% of health spending in 2021), musculoskeletal conditions (9.4%) and infectious diseases (9%). Another large share of health spending (15.1%) is for “ill-defined conditions,” which can include routine check-ups and follow-up care that is not easily designated for a particular illness.

Health Spending is a Function of Prices and Use

Health services spending is generally a function of prices (e.g., the dollar amount charged for a hospital stay) and utilization (e.g., the number of hospital stays).

People and health plans in the U.S. often pay higher prices for the same prescription drugs or hospital procedures than people in other large and wealthy nations do. In terms of utilization, there is not much evidence that people in the U.S. use more health care. In fact, Americans generally have shorter average hospital stays and fewer physician visits per capita. Therefore, a large part of the difference in health spending between the U.S. and its peers can be explained by higher prices, more so than higher utilization.

Over time, within the U.S., prices and utilization have driven health cost growth to varying degrees. In the 1980s and early 1990s, growth in health care prices far exceeded growth in use. Faster growth in health prices in the U.S. during this time drove the divergence in per capita health spending between the U.S. and other large, wealthy OECD countries. While health care prices have grown more moderately in recent decades, prices in the U.S. for health services continue to exceed what other countries pay.

More recently, the COVID-19 pandemic led to fluctuations in health care use. Early in the pandemic, many health services, such as elective surgeries, were postponed or cancelled and many elected to not get care to avoid infections at health care sites. In 2021, health services use increased by 9% from the previous year, but subsequent years showed slightly lower growth rates (2024 health services use increased 5.6% from 2023). This increase in health care use in 2021 followed a sharp decrease in health utilization in 2020. Health care prices increased moderately – between 2 and 3% – between 2020 and 2024, but changing market conditions since the pandemic and policies enacted in 2025 are likely to increase health costs at an increasing rate.

A small portion of the population accounts for a large share of health spending in a given year. Although we tend to focus on averages, a small number of people spend around the average since individual health needs vary over the life course. Some portions of the population (older adults and those with serious or chronic illnesses) require more and higher-cost health services than those who are younger, healthier, or otherwise in need of fewer or less costly services.

Older People and People with Significant Health Needs Account for Most Health Expenditures

While there are people with high spending at all ages, overall, people 55 and over accounted for 54% of total health spending in 2022, despite making up only 31% of the population. In contrast, people under age 35 made up 44% of the population but were responsible for only 23% of spending.

People with significant health needs account for a large portion of total health spending. People reporting fair or poor health status account for 11% of the population and 27% of the total health spending.

A Small Share of the Population Incurs Most of Health Spending

In 2022, the top 5% of people with the highest health spending accounted for half of total health spending and had an average of $67,300 in health expenditures annually; people with health spending in the top 1% have average spending of over $147,000 per year. At the other end of the spectrum, the 50% of the population with total health spending below or equal to the 50th percentile accounted for only 3% of all health spending; the average spending for this group was $374.

Out-of-pocket spending on health services is concentrated similarly to overall health spending. In this chart, out-of-pocket spending includes direct payments to providers and cost-sharing, including deductibles, copays, and coinsurance, but does not include monthly premium payments or contributions towards health coverage. Out-of-pocket health spending is similarly concentrated among high-health-need individuals. A small portion of the population accounts for a substantial share of total out-of-pocket health spending in a year.

In 2022, people in the top 1% of out-of-pocket spending paid about $23,700 out-of-pocket for health services on average per year, and people in the top 10% spent an average of $6,126 out-of-pocket per year. People who are in the bottom 50% of out-of-pocket spending spent an average of $24 out of pocket.

In addition to being expensive for the nation as a whole, health care is often also expensive for individuals. High health costs can particularly pose a hardship for people who are in worse health and those with lower incomes. However, challenges affording health care are not limited to certain groups; these challenges are pervasive across the U.S. Even people with private health insurance through their employers are often exposed to high and rising deductibles, and therefore also face affordability challenges. A substantial share of the population does not have enough savings or other liquid assets to afford a high deductible or out-of-pocket maximum common in private health plans.

When health care is unaffordable, it can lead to cost-related access barriers, like forgoing or delaying needed medical care. For those who still receive unaffordable health care, this care can lead to medical debt and other forms of financial instability. Some people experience both types of affordability challenges, missing some needed care while also incurring medical debt for other care.

Half of Adults Say it is Difficult to Afford Health Care Costs

Almost half of U.S. adults say it is difficult to afford health care costs, and one in four say they or a family member in their household had problems paying for health care in the past 12 months. Younger adults, those with lower incomes, adults in fair or poor health, and the uninsured are particularly likely to report problems affording health care in the past year.

Among those under age 65, uninsured adults are more likely to say affording health care costs is difficult (82%) compared to those with health insurance coverage (44%).

Those who are covered by health insurance are not immune to the burden of health care costs. About 4 in 10 insured adults worry about affording their monthly health insurance premium, and 62% worry about affording their deductible before health insurance kicks in. Indeed, large shares of adults with employer-sponsored insurance (ESI) and those with Marketplace coverage rate their insurance as “fair” or “poor” when it comes to their monthly premium and out-of-pocket costs to see a doctor.

1 in 3 Adults Report Putting Off Health Care Because of Cost

Cost-related barriers to accessing health care are more common for some demographic groups than others. For example, people who are Hispanic, lower-income, in worse health, and/or uninsured tend to have higher rates of self-reported cost-related access barriers.

One-quarter of adults say that in the past 12 months they have skipped or postponed getting health care they needed because of the cost, according to KFF polling. Women are more likely than men to say they have skipped or postponed getting health care they needed because of the cost (38% vs. 32%). Adults ages 65 and older, most of whom are eligible for health care coverage through Medicare, are much less likely than younger age groups to say they have not gotten health care they needed because of cost. Three in four uninsured adults (75%) say they have skipped or postponed getting health care they needed due to cost. Insured people are not immune from cost-related barriers to accessing care and more than one in three adults with insurance (37%) report not getting health care they needed due to cost.

Despite the vast majority of the United States population having health insurance, medical debt is not uncommon. Different ways of measuring medical debt result in different estimates of prevalence, but regardless of the method, there is consensus that medical debt is a persistent and pervasive problem in the United States, including for people with insurance.

One way to examine medical debt is through credit reporting, but medical debt is often disguised as other forms of debt when people pay for medical bills on their credit cards or choose to pay off their medical bills while falling behind on other payments.

Another way to measure medical debt is with surveys, which can allow respondents to describe their debt with more detail or nuance. Questions about medical debt and other financial matters can be difficult to compare across surveys. For example, it is not always clear whether respondents are answering about their personal experiences or about their broader family or household. Surveys may also differ in the way they define medical debt or describe what forms of debt to include. 

The KFF Health Care Debt Survey asked respondents to think about money that they currently owe for their own health or dental care or someone else’s, such as a family member or dependent. The KFF Health Care Debt Survey finds that 41% of adults currently have some form of debt caused by their own or a family member’s medical or dental bills.

The  U.S. Survey of Income and Program Participation (SIPP)  asks whether money was owed for a medical bill and not paid in full during the past year for each person in the sample household. SIPP results, therefore, can be looked at on the individual level or for an overall household. This survey shows that about 1 in 12 adults have medical debt they owe for themselves or their family’s medical care in the past year.

Regardless of the survey used to examine medical debt, common themes emerge when looking at differences across demographic groups: adults who are Black, uninsured, lower-income, and in worse health are more likely to have medical debt. People with incomes under $40,000 are significantly more likely than people with higher incomes to go into debt to cover an unexpected medical bill, and people with disabilities are also much more likely to have significant medical debt, which, in addition to the burden of medical costs, could also reflect inadequate supplemental income for people who are unable to work due to disability or illness.

Nationally, Medical Debt Totals at Least $200 Billion

The Consumer Financial Protection Bureau (CFPB) estimates that $88 billion in medical debt is reflected on Americans’ credit reports. However, credit reports may not capture all forms of medical debt. For example, medical debt disguised as credit card debt or money owed to family or friends may not be captured. Surveys may capture medical debt that is not visible on credit reports or is otherwise disguised as another form of debt. The 2023 Survey of Income and Program Participation suggests that total medical debt owed was at least $200 billion at the end of 2023.

Medical Debt is Associated with Financial Vulnerability Across a Range of Indicators

The National Financial Capability Survey (NFCS) is a triennial survey sponsored by the FINRA Foundation that provides information on the financial security, experiences, and vulnerabilities of people and households.

People with medical debt are much more likely to have other forms of financial distress than those without medical debt. Indicators of financial vulnerability — such as spending more money than one’s income, having no “rainy day” fund, or agreeing with the statement “I am just getting by financially” — are more common among adults with medical debt than those without. Additionally, people with medical debt are more likely to overdraw their checking account, have a credit card balance that exposes them to interest payments, take a cash advance on their credit card, or have been contacted by debt collectors. Adults with medical debt are much more likely to use payday loans or other costly loans than those without medical debt.

Each year, actuaries from the Centers for Medicare and Medicaid Services (CMS) project future spending on health. With health care utilization returning to pre-pandemic levels and price inflation in the health sector continuing to outpace general economic inflation, per-person health spending increased 7% in 2023. Annual per capita health spending is projected to grow at an annual rate of 5% per capita on average from 2023 to 2032.

An aging population, labor pressure driving higher prices, and new high-cost prescription drugs coming to market are expected to contribute to a growth in health spending. Health spending was 17.6% of the U.S. economy in 2023 and is expected to reach 19.7% by 2032.

The pandemic has had direct and indirect effects on the health system that can make projections difficult. COVID-19 has led to new costs for vaccination, testing, and treatment and has also caused other shifts in health utilization and spending. Some people avoided medical settings out of concern of contracting COVID and thus missed or delayed routine care or cancer screenings earlier in the pandemic, for example, which could lead to pent-up demand, worsening health conditions, or more complex disease management going forward. Increased use of telemedicine could also shift spending patterns in the future. Further, the recent broad-based inflation trends in the economy and health sector employment trends also add to the uncertainty of these projections.

Federal Government Infusion of Public Health Funding Has Subsided Since Early in the COVID-19 Pandemic

Total national health spending includes spending on direct patient care, as well as spending on public health or prevention. After a sharp increase in federal funding in 2020 driven by the national response to the COVID-19 pandemic, spending on public health has fallen, decreasing by over 58% between 2022 and 2023. Meanwhile, state and local public health spending grew 5%, in line with previous years. Overall public health spending is expected to continue to decline over the next couple of years.

Signed in July 2025, the tax and budget reconciliation law (formerly known as the “One Big Beautiful Bill Act”) includes provisions for addressing federal spending on Medicaid and Affordable Care Act exchanges. The Congressional Budget Office (CBO) expects the law to decrease spending on Medicaid and the Affordable Care Act (ACA) Marketplaces by over $1 trillion and lead to 10 million more uninsured people through 2034.

Additional policy issues that will shape future health spending and affordability include:

• Evolution of State Cost Controls: States implementing measures to control health cost growth, including those potentially supported by the Biden Administration’s new AHEAD model, may prompt further experimentation; however, states can only regulate a subset of private health insurance plans.
• Price Transparency Requirements: Federal price transparency requirements aim to illuminate prices paid to hospitals and providers. There remain challenges with the quality of the data, though CMS continues to request suggestions for improved guidelines. As for a budgetary impact, CBO predicted minimal impact on health sector prices.
• Prescription Drug Pricing: The Trump administration’s 2025 executive order called on pharmaceutical manufacturers to match most-favored-nation prices (MFN, the lowest price offered in other developed nations). The effects of this order on prescription drug prices in the U.S. remain uncertain. Additionally, the Inflation Reduction Act of 2022, targeting Medicare drug spending through government negotiation of drug prices, is expected to reduce Medicare costs, but potential far-reaching effects are still unclear. While CBO expects minimal effects on the availability of new treatments, there is considerable uncertainty surrounding those estimates.
• Expansion of Virtual Care: The COVID-19-induced rise in telehealth, with expanded reimbursement and access, has uncertain impacts on care coordination, quality, health outcomes, and costs.
• Market Dynamics and Anticompetitive Practices: Consolidation among providers, insurers, and drug manufacturers has elevated health care prices, leading to regulatory actions against anticompetitive practices, aiming to protect consumers from rising costs.
• Provider Payment Reforms: Bipartisan efforts in site-neutral payment reform, addressing concerns about higher payments in outpatient settings, have led to Medicare implementing site-neutral payments in some settings and additional legislative proposals. However, challenges in provider charging practices and facility fees persist.
• Value-Based Payment Models: The proliferation of value-based care aims to transfer some of the cost risks from payers to providers, but concerns remain about the effectiveness of these approaches, limited quality improvement, administrative burdens, and reduced physician participation incentives. 
• Changes in Coverage: Despite reduced uninsured rates through continuous Medicaid enrollment and expanded Affordable Care Act Marketplace subsidies during the pandemic, affordability challenges persist among the insured. Renewed disenrollments from Medicaid and the expiration of Marketplace subsidies after 2025 may increase uninsured rates and affordability issues.
• Addressing Medical Debt: Ongoing efforts to address medical debt involve buying medical debt for forgiveness and regulatory actions. However, the root causes of high health costs and underinsurance remain untouched by most efforts to mitigate the negative effects of medical debt.

• National Health Spending Explorer – Peterson-KFF Health System Tracker
• How has U.S. spending on healthcare changed over time? – Peterson-KFF Health System Tracker
• How much is health spending expected to grow? – Peterson-KFF Health System Tracker
• What are the recent and forecasted trends in prescription drug spending? – Peterson-KFF Health System Tracker
• How does medical inflation compare to inflation in the rest of the economy? – Peterson-KFF Health System Tracker
• How many people have enough money to afford private insurance cost sharing? – Peterson-KFF Health System Tracker
• Americans’ Challenges with Health Care Costs | KFF
• How does cost affect access to healthcare? – Peterson-KFF Health System Tracker
• The burden of medical debt in the United States – Peterson-KFF Health System Tracker
• Health Care Debt In The U.S.: The Broad Consequences Of Medical And Dental Bills | KFF

Amin, K., Cox, C., Ortaliza, J. & Wager, E., Health Care Costs and Affordability. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-health-care-costs-and-affordability/ (date accessed).

Medicaid is the primary program providing comprehensive coverage of health and long-term care to about 80 million low-income people in the United States. Medicaid accounts for nearly one-fifth of health care spending (and over half of spending for long-term care) and a large share of state budgets. Medicaid is jointly financed by states and the federal government but administered by states within broad federal rules. Because states have the flexibility to determine what populations and services to cover, how to deliver care, and how much to reimburse providers, there is significant variation across states in program spending and the share of people covered by the program.  Changes to Medicaid and the Affordable Care Act included in the tax and spending budget reconciliation law enacted in July 2025 are expected to reduce federal Medicaid spending by $911 billion over 10 years and reduce the number of people with health insurance by 10 million (three-quarters of which stems from the cuts to Medicaid).

Medicaid is the primary program providing comprehensive coverage of health care and long-term care to about 80 million low-income people in the United States. Medicaid accounts for nearly one-fifth of health care spending (and half of spending for long-term care) and a large share of state budgets (Figure 1).

Subject to federal standards, states administer Medicaid programs and have flexibility to determine what populations and services to cover, how to deliver care, and how much to reimburse providers. States can obtain Section 1115 waivers to test and implement approaches that differ from what is required by federal statute if the Secretary of Health and Human Services (HHS) determines the waivers would advance program objectives. Because of this flexibility, there is significant variation across state Medicaid programs, and, as a result, the share of state residents covered by the program (Figure 2).

Title XIX of the Social Security Act and a large body of federal regulations and sub-regulatory guidance govern the program, defining federal Medicaid requirements and states’ options and authorities. At the federal level, the Centers for Medicare and Medicaid Services (CMS) within the Department of Health and Human Services (HHS) administers Medicaid and oversees states’ programs. States may choose to participate in Medicaid, but if they do, they must comply with core federal requirements. Not all states opted to participate in Medicaid immediately after its enactment in 1965, but by the 1980s, all states had opted in. Medicaid coverage was historically tied to cash assistance—either Aid to Families with Dependent Children (AFDC) or federal Supplemental Security Income (SSI). Over time, Congress expanded federal minimum requirements and provided new coverage requirements and options for states, especially for children, pregnant women, and people with disabilities. In 1996, legislation replaced Aid to Families with Dependent Children with Temporary Assistance to Needy Families (TANF) and severed the link between Medicaid eligibility and cash assistance for children, pregnant women, and low-income parents. The Children’s Health Insurance Program (CHIP) was established in 1997 to cover low-income children above the cut-off for Medicaid with an enhanced federal match rate (Figure 3).

In 2010, the Affordable Care Act (ACA) expanded Medicaid to nearly all nonelderly adults with income up to 138% FPL ($21,597 annually for an individual in 2025) through a new coverage pathway for parents with incomes above states’ mandatory eligibility levels for parents/caretakers and adults without dependent children who had traditionally been excluded from Medicaid coverage. However, the ACA Medicaid expansion coverage is effectively optional for states because of a 2012 Supreme Court ruling. As of July 2025, 41 states, including Washington, D.C., have expanded Medicaid (Figure 4). States receive a higher rate of federal matching funding for people who are enrolled through the expansion coverage pathway. Under the ACA, all states were also required to modernize and streamline Medicaid eligibility and enrollment processes to help individuals obtain and maintain coverage.

The COVID-19 pandemic profoundly affected Medicaid spending and enrollment. At the start of the pandemic, Congress enacted legislation that included a requirement that Medicaid programs keep people continuously enrolled in exchange for enhanced federal funding. As a result, Medicaid/CHIP enrollment grew substantially, and the uninsured rate dropped. The unwinding of these provisions started on April 1, 2023, and millions were disenrolled from Medicaid; however, Medicaid enrollment remains higher than prior to the start of the pandemic in February 2020.

Passage of the tax and spending reconciliation budget bill in July 2025 included significant changes to Medicaid that are expected to reduce federal Medicaid funding and reduce Medicaid enrollment over the next 10 years relative to what would have been expected under current law. For the first time, the law conditions Medicaid eligibility for Medicaid expansion enrollees on meeting work and reporting requirements.  These work requirements, which will go into effect on January 1, 2027, or sooner at state option, represent the largest source of federal Medicaid funding reductions and the largest source of enrollment declines in the law. The law makes other changes. Beyond work requirements, the largest cuts to Medicaid stem from provisions that would: reduce and limit provider taxes, a mechanism that nearly all states use to finance the state share of Medicaid; reduce the payments states require managed care organizations to make to health care providers (“state-directed payments”); delaying enforcement of certain provisions in the Biden administration’s rules simplifying Medicaid eligibility and renewal processes; and increasing frequencies of eligibility redeterminations for expansion enrollees. Combined, those changes and work requirements account for nearly 90% of the expected cuts in federal spending according to the Congressional Budget Office (CBO).

States are guaranteed federal matching dollars without a cap for qualified services provided to eligible enrollees. The match rate for most Medicaid enrollees is determined by a formula in the law that provides a match of at least 50% and provides a higher federal match rate for states with lower per capita income (Figure 5). States may receive a higher match rate for certain services and populations. The ACA expansion group is financed with a 90% federal match rate, so states pay 10%, and the American Rescue Plan Act included an additional temporary fiscal incentive to states that newly adopt the Medicaid expansion; however, the tax and spending law eliminated the incentive, effective January 1, 2026. In FY 2023, Medicaid spending totaled $880 billion of which 69% was federal spending. Medicaid spending growth typically accelerates during economic downturns as enrollment increases. Spending growth also peaked after the implementation of the ACA and, more recently, due to enrollment growth tied to the pandemic-related continuous enrollment provision.

Overall, Medicaid accounts for a large share of most states’ budgets and is often central to state fiscal decisions; however, state spending on Medicaid is second to state spending on elementary and secondary education, and the program is also the largest source of federal revenue for states. In state fiscal year 2023, Medicaid accounted for 30% of total state expenditures, 15% of expenditures from state funds (general funds and other funds), and 57% of expenditures from federal funds received by the state.

Social Security, Medicare , and Medicaid are the three main entitlement programs, accounting for 41% of all federal outlays in FFY 2024. Of these three programs, Medicaid is the smallest in terms of federal outlays, though it covers more people than Medicare or Social Security. Overall, federal spending on domestic and global health programs and services accounted for 29% of net federal outlays in FFY 2023, including spending on Medicare (13%), Medicaid and CHIP (10%), and other health spending (6%). Dating back to the 1980s, there have been efforts to limit federal financing for Medicaid either through a block grant to states or through a cap on spending per enrollee as a way to help reduce federal spending. Such efforts could shift costs to states, forcing them to make tough choices about whether to pay for the federal cuts, which would require higher taxes or reductions in non-Medicaid state spending, or to reduce Medicaid spending by limiting Medicaid eligibility, covering fewer benefits, or paying less to providers. Although early discussions over the tax and spending law included proposals that would have reduced the federal Medicaid match rate and imposed a cap on per-enrollee spending, these changes to Medicaid financing were not included in the final version of the bill that passed.

Medicaid is an entitlement, meaning individuals who meet eligibility requirements are guaranteed coverage. The federal government sets minimum eligibility standards, but states may expand coverage beyond these minimum requirements.  Federal minimum eligibility levels for children and pregnant individuals are set at 133% of the federal poverty level (FPL) with a mandatory 5 percentage point income disregard or effectively 138% FPL ($36,777 for a family of 3 in 2025); however, median eligibility levels for these groups were 255% FPL for children and 213% FPL for pregnant individuals as of January 2025. As a result of the ACA, the median coverage level for parents and adults without dependent children is 138% FPL, but for states that have not adopted the ACA expansion, the median eligibility for parents was 33% FPL. In non-expansion states, adults without dependent coverage are not eligible for Medicaid coverage and those with incomes below the FPL fall into the coverage gap.

Medicaid coverage is also available to certain individuals who qualify on the basis of being age 65 and older or having a disability. These coverage categories are referred to as “non-MAGI” pathways because they do not use the Modified Adjusted Gross Income (MAGI) financial methodology that applies to pathways for pregnant people, parents, and children with low incomes. In addition to considering advanced age, disability status, and income, many non-MAGI pathways also have asset limits. Medicaid generally covers individuals who qualify for Supplemental Security Income (SSI), but nearly all other non-MAGI pathways are optional, resulting in substantial state variation.  Each group has different rules about income and assets, making eligibility complex (Figure 6).

Medicaid coverage is limited for immigrants, and except for emergency services, Medicaid coverage is not available for undocumented immigrants. A number of states, however, use state funds to provide coverage to all or some undocumented immigrants.

While Medicaid covers 1 in 5 people living in the United States, Medicaid is a particularly significant source of coverage for certain populations. In 2023, Medicaid covered 4 in 10 children, 8 in 10 children in poverty,  1 in 6 nonelderly adults, and 6 in 10 nonelderly people in poverty. Relative to White children and adults, Medicaid covers a higher share of Black, Hispanic, and American Indian or Alaska Native (AIAN) children and adults. Medicaid covers over 1 in 3 people with disabilities overall (4 in 10 people with disabilities ages 19-64), who are defined as having one or more difficulty related to hearing, vision, cognition, ambulation, self-care, or independent living (Figure 7).

Medicaid provides coverage for a number of special populations.  For example, Medicaid covers 41% of all births in the United States, 42% of children with special health care needs, 5 in 8 nursing home residents, 29% of non-elderly adults with any mental illness, and 40% of non-elderly adults with HIV. Medicaid pays Medicare premiums and often provides wraparound coverage for services not covered by Medicare (like most long-term care) for nearly 1 in 5 Medicare beneficiaries (13 million).  Medicaid is a key source of coverage for individuals experiencing homelessness and those transitioning out of carceral settings, particularly in states that have adopted the Medicaid expansion.

Among the non-elderly covered by Medicaid, nearly half are children under age 19, 6 in 10 are people of color, 57% are female, and three-quarters are in a family with a full- or part-time worker. Even though most adult Medicaid enrollees are working, many do not have an offer of employer-sponsored coverage, or it is not affordable.

Medicaid covers a broad range of services to address the diverse needs of the populations it serves. In addition to covering the services required by federal Medicaid law, all states elect to cover at least some services that are not mandatory (Figure 8). All states cover prescription drugs, and most states cover physical therapy, eyeglasses, and dental care. Medicaid provides comprehensive benefits for children, known as Early Periodic Screening Diagnosis and Treatment (EPSDT) services. EPSDT is especially important for children with disabilities because it allows children access to a broader set of benefits to address complex health needs than what is traditionally covered by private insurance. Unlike commercial health insurance and Medicare, Medicaid also covers non-emergency medical transportation, which helps enrollees get to appointments, and long-term care, including nursing home care and many home care services (also known as home and community-based services, or HCBS). Coverage for long-term care is mandatory for nursing facilities, but most coverage of home care is optional. In recent years, states have expanded coverage of behavioral health services and benefits to help enrollees address social determinants of health (SDOH) like nutrition or housing.

Most people age 65 and older and many people under age 65 with disabilities have Medicare, but Medicare does not cover most LTC; instead, Medicaid is the primary payer for LTC. LTC encompasses the broad range of paid and unpaid medical and personal care services that assist with activities of daily living (such as eating, bathing, and dressing) and instrumental activities of daily living (such as preparing meals, managing medication, and housekeeping). They are provided to people who need such services because of aging, chronic illness, or disability. These services include nursing facility care, adult daycare programs, home health aide services, personal care services, transportation, and supported employment. They may be provided over several weeks, months, or years, depending on an individual’s health care coverage and level of need. There have been longstanding challenges finding enough workers to provide LTC for all people who need such services, and the COVID-19 pandemic exacerbated those issues considerably. As the population ages and advances in medicine and technology enable people with serious disabilities to live longer, the number of people in need of LTC is expected to grow.

In 2024, the median annual costs of care in the U.S. were $127,750 for a private room in a nursing home, $70,800 for an assisted living facility, and $77,792 for a home health aide. Medicare provides home health and skilled nursing facility care under specific circumstances, but the Medicare benefit is considered “post-acute” care and generally not available for people needing services on an ongoing basis. Medicaid plays a key role in access to LTC for people who qualify because LTC costs are difficult for most people to afford when paying out-of-pocket. In some cases, people only qualify for Medicaid after exhausting their savings on the costs of LTC. In 2023, Medicaid paid 61% of the $459 billion spent on LTC in the U.S. (Figure 9).

LTC may be provided in various settings broadly categorized as institutional or non-institutional. Institutional settings include nursing facilities and intermediate care facilities for people with intellectual disabilities. Services provided in non-institutional settings are known as home care (also known as home and community-based services, or HCBS), and these settings may include a person’s home, adult day care centers, assisted living settings, and group homes. Federal Medicaid statutes require states to cover institutional LTC and home health, but nearly all home care is optional. Even without a mandate to cover home care, Medicaid LTC spending has shifted from institutional to non-institutional settings over time. In 2023, most spending for LTC in the U.S. was for home care (Figure 9). That shift reflects beneficiary preferences for receiving care in non-institutional settings and requirements for states to provide services in the least restrictive setting possible stemming from the Olmstead decision. In 2023, there were 6.3 million people who used Medicaid LTC, of which 4.9 million (77%) used home care and 1.4 million (23%) used institutional care (Figure 10). While overall, over three-quarters of people who used Medicaid LTC exclusively used home care services, the share varied across states (Figure 10).  To qualify for coverage of LTC under Medicaid, people must meet state-specific eligibility requirements regarding their levels of income, wealth, and functional limitations.

Managed care is the dominant delivery system for Medicaid enrollees with 75% of Medicaid beneficiaries enrolled in comprehensive managed care organizations (MCOs). Medicaid MCOs provide comprehensive acute care and, in some cases, LTC to Medicaid beneficiaries and are paid a set per member per month payment for these services. In FFY 2023, payments to managed care and health plans accounted for the largest share (55%) of Medicaid spending, with capitated payments to comprehensive MCOs accounting for 52% of Medicaid spending and payments to other Medicaid managed care (e.g., primary care case management (PCCM) arrangements or specialty plans) accounting for another 3% (Figure 11). Smaller shares of total Medicaid spending in FFY 2023 were for fee-for-service acute care (21%), fee-for-service LTC (19%), Medicaid spending for Medicare premiums on behalf of enrollees who also have Medicare (3%), and disproportionate share hospital (DSH) payments (2%).

Medicaid spending is driven by multiple factors, including the number and mix of enrollees, their use of health care and long-term care, the prices of Medicaid services, and state policy choices about benefits, provider payment rates, and other program factors. During economic downturns, enrollment in Medicaid grows, increasing state Medicaid costs while state tax revenues are declining. Due to the federal match, as spending increases during economic downturns, so does federal funding. During the pandemic-induced recession and the two economic downturns prior to the pandemic, Congress enacted legislation that temporarily increased the federal share of Medicaid spending to provide increased support for states to help fund Medicaid. High enrollment growth rates, tied first to the Great Recession, then ACA implementation, and later the pandemic, were the primary drivers of total Medicaid spending growth over the last two decades (Figure 12).

People eligible based on being age 65 or older or based on a disability comprise about 1in 5 enrollees but account for more than half of Medicaid spending, reflecting high health care needs and in many cases, use of LTC (Figure 13).

Across the states, spending per full-benefit enrollee ranged from a low of $4,780 in Alabama to $12,295 in the District of Columbia in 2023. Variation in spending across the states reflects considerable flexibility for states to design and administer their own programs – including what benefits are covered and how much providers are paid — and variation in the health and population characteristics of state residents. Within each state, there is also substantial variation in the average costs for each eligibility group, and within each eligibility group, per-enrollee costs may vary significantly, particularly for individuals eligible based on disability (Figure 14).

In 2023, people who used Medicaid LTC comprised 6% of Medicaid enrollment but 36% of federal and state Medicaid spending (Figure 15). High per-person Medicaid spending among enrollees who use LTC likely reflects the generally high cost of LTC and more extensive health needs among such groups that lead to higher use of other health care services and drugs as well.

As of July 2024, 42 states (including Washington, D.C.) contract with comprehensive, risk-based managed care plans – often administered by private insurance companies – to provide care to at least some of their Medicaid beneficiaries (Figure 16). Medicaid MCOs provide comprehensive acute care (i.e., most physician and hospital services) and, in some cases, LTC to Medicaid beneficiaries and are paid a set per member per month payment for these services. Medicaid MCOs represent a mix of private for-profit, private non-profit, and government plans. States have increased their reliance on MCOs with the aim of improving access to certain services, enhancing care coordination and management, and making future costs more predictable. While the shift to MCOs has increased budget predictability for states, the evidence about the impact of managed care on access to care, costs, and outcomes is both limited and mixed. Children and adults are more likely to be enrolled in MCOs than adults aged 65 and older and people eligible because of a disability; however, states are increasingly including beneficiaries with complex needs in MCOs. States are also increasingly leveraging Medicaid MCOs to help identify and address social determinants of health and to reduce health disparities.

A large body of research shows that Medicaid enrollees have substantially better access to care than people who are uninsured (who are also primarily low-income) and are less likely to postpone or go without needed care due to cost. Key measures of access to care and satisfaction with care among Medicaid enrollees are generally comparable to rates for people with private insurance (Figure 17). Given Medicaid enrollees have low incomes, federal rules include protections to limit out-of-pocket costs that can help improve access.  A 2023 KFF Survey of Consumer Experiences with Health Insurance found Medicaid enrollees report fewer cost-related problems compared to those with Marketplace or employer coverage. While most Medicaid enrollees will continue to be protected against large out-of-pocket costs, the tax and spending law newly requires states to impose cost sharing of up to $35 on certain services on Medicaid expansion adults who have incomes 100% – 138% FPL.

Longstanding research shows that Medicaid eligibility during childhood is associated with positive effects on health (including reduced avoidable hospitalizations and mortality) and impacts beyond health, such as improved long-run educational attainment. Early and updated research findings show that state Medicaid expansions to low-income adults are associated with increased access to care, increased economic security, improved self-reported health status, and other outcomes including increased early-stage cancer diagnosis rates, lower mortality rates for certain conditions (e.g., cancer, cardiovascular disease, liver disease), decreased maternal mortality, improved treatment management for conditions (e.g., diabetes, HIV), and improved outcomes related to substance use disorders. Gaps in access to certain providers (e.g., psychiatrists and dentists) are an ongoing challenge in Medicaid that may reflect system-wide problems, but may be exacerbated by provider shortages in low-income communities, Medicaid’s lower physician payment rates, and lower Medicaid physician participation compared with private insurance. In 2021, MACPAC found physicians were less likely to accept new Medicaid patients (74%) than those with Medicare (88%) or private insurance (96%), but these rates may vary by state, provider type, and setting. Medicaid acceptance was much higher where physicians practiced in community health centers, mental health centers, non-federal government clinics, and family clinics compared to the average for all settings. Provider participation rates may contribute to findings that Medicaid enrollees may experience more difficulty obtaining health care than those with private insurance.  A 2023 KFF Survey of Consumers found Medicaid enrollees report more problems with prior authorization and provider availability compared to people with other insurance types.

Section 1115 demonstration waivers offer states the ability to test new approaches in Medicaid that differ from what is required by federal statute, if CMS determines that such proposals are “likely to assist in promoting the objectives of the Medicaid program.” Nearly all states have at least one active Section 1115 waiver and some states have multiple 1115 waivers. Section 1115 waivers have been used over time and generally reflect priorities identified by the states as well as changing priorities from one presidential administration to another (Figure 18). Waivers have been used to expand coverage or benefits, change policies for existing Medicaid populations (e.g., testing premiums or other eligibility requirements), modify delivery systems, restructure financing or authorize new payments (e.g., supplemental payments or incentive-based payments), as well as make other program changes. 

Activity from the first Trump administration and the Biden administration tested how 1115 waivers can be used to advance administrative priorities and also tested the balance between states’ flexibility and discretion by the federal government. The first Trump administration’s Section 1115 waiver policy emphasized work requirements and other eligibility restrictions, payment for institutional behavioral health services, and capped financing. The Biden administration withdrew waiver approvals with work requirements, phased out approval of premium requirements, and instead encouraged states to propose waivers that expand coverage, reduce health disparities, advance “whole-person care,” and improve access to behavioral health care. Areas of focus during the Biden administration included leveraging Medicaid to address health-related social needs (including housing instability, homelessness, nutrition insecurity) and to provide health care to individuals transitioning from incarceration back into the community. Several states also received approval to provide multi-year continuous Medicaid coverage for children. Recent actions from the new Trump administration could signal efforts to curtail waivers related to social determinants of health, continuous eligibility and to limit 1115 waiver financing tools and flexibility. In addition, several states are seeking approval for work requirements waivers. Although the tax and spending reconciliation law now includes a national work requirement, some states may continue to pursue waivers to implement work requirements prior to January 1, 2027 when the national requirement goes into effect.

Various types of waivers and other emergency authorities can also be used to respond to emergencies. These authorities can help expand Medicaid capacity and focus on specific services, providers, or groups of enrollees that may be particularly impacted. During the COVID-19 pandemic, all 50 states and Washington, D.C. received approval to make changes using emergency authorities to facilitate access to care by expanding telehealth, eligibility, benefits and help address workforce issues for home- and community-based services.

Looking to the future, Medicaid faces a number of challenges, including: 

• How will the new work requirements, eligibility and cost sharing changes affect Medicaid enrollment and access to care, particularly for adults covered through the Medicaid expansion?
• What impact will the Medicaid changes have on the number of people without health insurance?
• How will states respond to federal Medicaid spending cuts and limits on their ability to use provider taxes to help finance the non-federal share of Medicaid spending?
• How will the cuts in Medicaid spending and enrollment affect health care providers (including rural providers) and the broader health care system? To what extent will a new temporary rural health fund totaling $50 billion blunt some of the effects of the cuts?
• Will administrative actions and federal funding cuts for Medicaid as well as broader federal changes in immigration policy affect Medicaid payment rates for long-term care and the long-term care workforce?
• Will Congress move to reverse some of the Medicaid cuts before they go into effect?

Policy changes to Medicaid have implications for the roughly 80 million people who rely on the program for health coverage, state and federal budgets and spending, and health care providers, including nursing facilities and home care providers. As the source of nearly one fifth of total health care spending, these changes will also have implications for the broader health care system. Changes in Medicaid enrollment will also affect overall coverage trends. Declines in Medicaid enrollment can be expected to increase the number of people who are uninsured, jeopardizing improvements in the affordability of and access to care for potentially millions of people.  

• 10 Things to Know About Medicaid
• Medicaid: What to Watch in 2025 | KFF
• Medicaid Financing: The Basics
• 10 Things to Know About Medicaid Managed Care
• 10 Things About Long-Term Services and Supports (LTSS)
• 50-State Medicaid Budget Survey Archives
• 50-State Medicaid Eligibility Survey Archives
• 50-State Survey Archives: Medicaid HCBS and Eligibility Based on Disability or Age 65+
• Status of State Medicaid Expansion Decisions: Interactive Map
• Medicaid Waiver Tracker: Approved and Pending Section 1115 Waivers by State
• Allocating CBO’s Estimates of Federal Medicaid Spending Reductions Across the States: Enacted Reconciliation Package | KFF
• Health Provisions in the 2025 Federal Budget Reconciliation Law
• Implementation Dates for 2025 Budget Reconciliation Law

Rudowitz, R., Tolbert, J., Burns, A., Hinton, E., Chidambaram, P., & Mudumala, A., Medicaid 101. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-medicaid/ (date accessed)

Medicare is the federal health insurance program established in 1965 under Title XVIII of the Social Security Act for people age 65 or older, regardless of income or medical history, and later expanded to cover people under age 65 with long-term disabilities. Today, Medicare provides health insurance coverage to 68 million people, including 61 million people age 65 or older and 7 million people under age 65. Medicare covers a comprehensive set of health care services, including hospitalizations, physician visits, and prescription drugs, along with post-acute care, skilled nursing facility care, home health care, hospice, and preventive services. People with Medicare can choose to get coverage under traditional Medicare or Medicare Advantage private plans.

Medicare spending comprised 13.5% of the federal budget in 2024 and 21.2% of national health care spending in 2023. Funding for Medicare comes primarily from government contributions, payroll tax revenues, and premiums paid by beneficiaries. Over the longer term, the Medicare program faces financial pressures associated with higher health care costs, growing enrollment, and an aging population.

Most people become eligible for Medicare when they reach age 65, regardless of income, health status, or medical conditions. Residents of the U.S., including citizens and permanent residents, are eligible for premium-free Medicare Part A if they have worked at least 40 quarters (10 years) in jobs where they or their spouses paid Medicare payroll taxes and are at least 65 years old. People under age 65 who receive Social Security Disability Insurance (SSDI) payments generally become eligible for Medicare after a two-year waiting period. People diagnosed with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) become eligible for Medicare with no waiting period.

Medicare covers a diverse population in terms of demographics and health status, and this population is expected to grow larger and more diverse in the future as the U.S. population ages. Currently, most people with Medicare are White, female, and between the ages of 65 and 84 (Figure 1). The share of U.S. adults who are age 65 or older is projected to grow from 17% in 2022 to nearly a quarter of the nation’s total population (24%) in 2060. Among people ages 65 and older, the share of people ages 80 and older will increase from 23% in 2022 to 34% in 2060. As the U.S. population ages, the number of Medicare beneficiaries is projected to grow by more than one-third from 68 million people in 2024 to more than 93 million people in 2060. The Medicare population will also grow more racially and ethnically diverse. By 2060, people of color will comprise 44% of the U.S. population ages 65 and older, up from a quarter in 2022.

While many Medicare beneficiaries enjoy good health, others live with health problems that affect their quality of life, including multiple chronic conditions, limitations in their activities of daily living, and cognitive impairments. In 2022, nearly half (45%) of Medicare beneficiaries had four or more chronic conditions, more than a quarter (28%) had a functional impairment, and 17% had a cognitive impairment (Figure 2).

Most Medicare beneficiaries have limited financial resources, including income and assets. In 2024, one in four Medicare beneficiaries – 16.5 million people with Medicare – lived on incomes below $24,600 per person, and half (32.9 million) of all Medicare beneficiaries lived on incomes below $43,200 per person; one in four Medicare beneficiaries had savings below $18,950 per person in 2024, while half had savings below $110,100 per person. Income among Medicare beneficiaries is generally lower for women than men, for people of color than White beneficiaries, and for beneficiaries under age 65 with disabilities than older beneficiaries (Figure 3).

Benefits. Medicare covers a comprehensive set of medical care services, including hospital stays, physician visits, and prescription drugs. Medicare benefits are divided into four parts: 

• Part A, also known as the Hospital Insurance (HI) program, covers inpatient care provided in hospitals and short-term stays in skilled nursing facilities, hospice care, post-acute home health care, and pints of blood received at a hospital or skilled nursing facility. An estimated 67.5 million people were enrolled in Part A in 2024. In 2023, 13% of beneficiaries in traditional Medicare had an inpatient hospital stay, while 7% used home health care services (which are also covered under Part B), and 3% had a skilled nursing facility stay (Figure 4). (Comparable utilization data for beneficiaries in Medicare Advantage is not available.)
• Part B,the Supplementary Medical Insurance (SMI) program, covers outpatient services such as physician visits, outpatient hospital care, and preventive services (e.g., mammography and colorectal cancer screening), among other medical benefits. An estimated 62 million people were enrolled in Part B in 2024. A larger share of beneficiaries use Part B services compared to Part A services. For example, in 2023, more than 9 in 10 (92%) traditional Medicare beneficiaries used physician and other services covered under Part B and 59% used outpatient hospital services.
• Part C, more commonly referred to as the Medicare Advantage program, allows beneficiaries to enroll in a private plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO), as an alternative to traditional Medicare. Medicare Advantage plans cover all benefits under Medicare Part A, Part B, and, in most cases, Part D (Medicare’s outpatient prescription drug benefit), and typically offer extra benefits, such as dental services, eyeglasses, and hearing exams. In 2025, 34.1 million beneficiaries are enrolled in Medicare Advantage, which is 54% of Medicare beneficiaries who are eligible to enroll in Medicare Advantage plans. (See “What Is Medicare Advantage and How Is It Different From Traditional Medicare?” for additional information.) 
• Part D is a voluntary outpatient prescription drug benefit delivered through private plans that contract with Medicare, either stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug (MA-PD) plans. In 2025, 54.8 million beneficiaries are enrolled in Part D, with 58% enrolled in MA-PDs and 42% enrolled in PDPs. In 2023, over 9 in 10 Medicare beneficiaries enrolled in Part D (93%) used prescription drugs. (See “What Is the Medicare Part D Prescription Drug Benefit?” for additional information.)

Although Medicare covers a comprehensive set of medical benefits, Medicare does not cover long-term care services. Additionally, coverage of vision services, dental care, and hearing aids is not part of the standard benefit, though most Medicare Advantage plans offer some coverage of these services.

Premiums and cost sharing. Medicare has varying premiums, deductibles, and coinsurance amounts that typically change each year to reflect program cost changes.

• Part A: Most beneficiaries do not pay a monthly premium for Part A services, but are required to pay a deductible for inpatient hospitalizations ($1,676 in 2025). (People who are working contribute payroll taxes to Medicare and qualify for premium-free Part A at age 65 based on having paid 1.45% of their earnings over at least 40 quarters.) Beneficiaries are generally subject to cost sharing for Part A benefits, including extended inpatient stays in a hospital ($419 per day for days 61-90 and $838 per day for days 91-150 in 2025) or skilled nursing facility ($209.50 per day for days 21-100 in 2025). There is no cost sharing for home health visits.
• Part B: Beneficiaries enrolled in Part B, including those in traditional Medicare and Medicare Advantage plans, are generally required to pay a monthly premium ($185 in 2025). Beneficiaries with annual incomes greater than $106,000 for a single person or $212,000 for a married couple in 2025 pay a higher, income-related monthly Part B premium, ranging from $259 to $628.90. Approximately 8% of Medicare beneficiaries with Part B coverage are expected to pay income-related Part B premiums in 2025. Part B benefits are subject to an annual deductible ($257 in 2025), and most Part B services are subject to coinsurance of 20 percent.
• Part C: In addition to paying the Part B premium, Medicare Advantage enrollees may be charged a separate monthly premium for their Medicare Advantage plan, although three-quarters (76%) of enrollees are in plans that charge no additional premium in 2025. Medicare Advantage plans are generally prohibited from charging more than traditional Medicare, but vary in the deductibles and cost-sharing amounts they charge. Medicare Advantage plans typically establish provider networks and may require higher cost sharing for services received from non-network providers.
• Part D: Part D plans vary in terms of premiums, deductibles, and cost sharing. People in traditional Medicare who are enrolled in a separate stand-alone Part D plan generally pay a monthly Part D premium unless they qualify for full benefits through the Part D Low-Income Subsidy (LIS) program and are enrolled in a premium-free (benchmark) plan. In 2025, the average enrollment-weighted premium for stand-alone Part D plans is $39 per month, substantially higher than the enrollment-weighted average monthly portion of the premium for drug coverage in MA-PDs ($7 in 2025).

Sources of coverage. Most people with Medicare have some type of coverage that may protect them from unlimited out-of-pocket costs and may offer additional benefits, whether it’s coverage in addition to traditional Medicare or coverage from Medicare Advantage plans, which are required to have an out-of-pocket cap and typically offer supplemental benefits (Figure 5). However, based on KFF analysis of data from the 2022 Medicare Current Beneficiary Survey, 3.2 million people with Medicare have no additional coverage, which places them at risk of facing high out-of-pocket spending or going without needed medical care due to costs. 

• Medicare Advantage plans now cover more than half (54%) of all Medicare beneficiaries enrolled in both Part A and Part B, or 34 million people (in 2022, Medicare Advantage enrollment was just under half of beneficiaries, or 29.9 million people). (See “What Is Medicare Advantage and How Is It Different From Traditional Medicare?” for additional information.)
• Employer and union-sponsored plans provided some form of coverage to 14.5 million Medicare beneficiaries – nearly a quarter (24%) of Medicare beneficiaries overall in 2022. Of the total number of beneficiaries with employer coverage, 9.1 million beneficiaries had this coverage in addition to traditional Medicare (31% of beneficiaries in traditional Medicare), while 5.4 million beneficiaries were enrolled in Medicare Advantage employer group plans. (These estimates exclude 5.6 million Medicare beneficiaries with Part A only in 2022, primarily because they or their spouse were active workers and had primary coverage from an employer plan and Medicare as a secondary payer.) 
• Medicare supplement insurance, also known as Medigap, covered 2 in 10 (21%) Medicare beneficiaries overall, or 42% of those in traditional Medicare (12.5 million beneficiaries) in 2022. Medigap policies, sold by private insurance companies, fully or partially cover Medicare Part A and Part B cost-sharing requirements, including deductibles, copayments, and coinsurance. 
• Medicaid, the federal-state program that provides health and long-term services and supports coverage to low-income people, was a source of coverage for 11.6 million Medicare beneficiaries with low incomes and modest assets in 2022 (19% of all Medicare beneficiaries), including 7.0 million enrolled in Medicare Advantage and 4.6 million in traditional Medicare. (This estimate is somewhat lower than KFF estimates published elsewhere due to different data sources and methods used.) For these beneficiaries, referred to as dual-eligible individuals, Medicaid typically pays the Medicare Part B premium and may also pay a portion of Medicare deductibles and other cost-sharing requirements. Most dual-eligible individuals are eligible for full Medicaid benefits, including long-term services and supports.

Medicare Advantage, also known as Medicare Part C, allows beneficiaries to receive their Medicare benefits from a private health plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO). Medicare pays private insurers to provide Medicare-covered benefits (Part A and B, and often Part D) to enrollees. Virtually all Medicare Advantage plans include an out-of-pocket limit for benefits covered under Parts A and B, and most offer additional benefits not covered by traditional Medicare, such as vision, hearing, and dental. The average Medicare beneficiary can choose from 34 Medicare Advantage plans with prescription drug coverage offered by eight insurance companies in 2025. These plans vary across many dimensions, including premiums, cost-sharing requirements, out-of-pocket limits, extra benefits, provider networks, prior authorization and referral requirements, denial rates, and prescription drug coverage.

More than half of all eligible Medicare beneficiaries (54%) are currently enrolled in a Medicare Advantage plan, up from 25% in 2010 (Figure 6). The share of eligible Medicare beneficiaries in Medicare Advantage plans varies across states, ranging from 2% in Alaska to 63% in Alabama and Michigan.  Growth in Medicare Advantage enrollment is due to a number of factors. Medicare beneficiaries are attracted to Medicare Advantage due to the multitude of extra benefits, the simplicity of one-stop shopping (in contrast to traditional Medicare where beneficiaries might also purchase a Part D plan and a Medigap plan), and the availability of plans with no premiums beyond the Part B premium, driven in part by the current payment system that generates high gross margins in this market (see “How Does Medicare Pay Private Plans in Medicare  Advantage and Medicare Part D?” for additional information). Insurers market these plans aggressively, airing thousands of TV ads for Medicare Advantage during the Medicare open enrollment period. In some cases, Medicare beneficiaries have no choice but to be enrolled in a Medicare Advantage plan for their retiree health benefits as some employers are shifting their retirees into these plans; if they are dissatisfied with this option, they may have to give up retiree benefits altogether, although they would retain Medicare and have the option to choose traditional Medicare (potentially with a Medigap supplement).

There are several differences between Medicare Advantage and traditional Medicare. Medicare Advantage plans can establish provider networks, the size of which can vary considerably for both physicians and hospitals, depending on the plan and the county where it is offered. These provider networks may also change over the course of the year. Medicare Advantage enrollees who seek care from an out-of-network provider might be required to pay higher cost sharing or pay in full out of pocket for their care. In contrast, traditional Medicare beneficiaries can see any provider that accepts Medicare and is accepting new patients. In 2019, 89% of non-pediatric office-based physicians accepted new Medicare patients, with little change over time. Only 1% of all non-pediatric physicians formally opted out of the Medicare program in 2024.

Medicare Advantage plans also often use tools to manage utilization and costs, such as requiring enrollees to receive prior authorization before a service will be covered and requiring enrollees to obtain a referral for specialists or mental health providers. In 2024, virtually all Medicare Advantage enrollees were in plans that required prior authorization for some services, most often higher-cost services. Medicare Advantage insurers made nearly 50 million prior authorization determinations in 2023 (Figure 7). Prior authorization and referrals to specialists are used less frequently in traditional Medicare, with prior authorization generally applying to a limited set of services.

Medicare Advantage plans are required to use payments from the federal government that exceed their costs of covering Part A and B services (known as rebates) to provide supplemental benefits to enrollees, such as lower cost sharing, extra benefits not covered by traditional Medicare, or reducing the amount of Part B and/or Part D premiums. Examples of extra benefits include eyeglasses, hearing exams, preventive dental care, and gym memberships (Figure 8). (See “How Does Medicare Pay Private Plans in Medicare Advantage and Medicare Part D?” for a discussion of how Medicare pays Medicare Advantage plans.) Medicare Advantage plans must also include a cap on out-of-pocket spending, which provides protection from catastrophic medical expenses. Traditional Medicare does not have an out-of-pocket limit, though purchasing a Medigap policy effectively provides protection from catastrophic costs for beneficiaries in traditional Medicare. (See “What Does Medicare Cover and How Much Do People Pay for Medicare Benefits?” for a brief discussion of Medigap.)

Medicare Part D, Medicare’s voluntary outpatient prescription drug benefit, was established by the Medicare Modernization Act of 2003 (MMA) and launched in 2006. Before the addition of the Part D benefit, Medicare did not cover the cost of outpatient prescription drugs. Under Part D, Medicare helps cover prescription drug costs through private plans that contract with Medicare to offer the Part D benefit to enrollees, which is unlike coverage of Part A and Part B benefits under traditional Medicare, and beneficiaries must enroll in a Part D plan if they want this benefit.

A total of 54.8 million people with Medicare are currently enrolled in plans that provide the Medicare Part D drug benefit, including plans open to everyone with Medicare (stand-alone prescription drug plans, or PDPs, and Medicare Advantage drug plans, or MA-PDs) and plans for specific populations (including retirees of a former employer or union and Medicare Advantage Special Needs Plans, or SNPs). Nearly 6 in 10 Part D enrollees are in MA-PDs, as overall enrollment in Medicare Advantage plans has grown in recent years. Just over 13 million low-income beneficiaries receive extra help with their Part D plan premiums and cost sharing through the Part D Low-Income Subsidy Program (LIS).

For 2025, the average Medicare beneficiary has a choice of 14 stand-alone Part D plans and 34 Medicare Advantage drug plans. These plans vary in terms of premiums, deductibles and cost sharing, the drugs that are covered, any utilization management restrictions that apply, and pharmacy networks. People in traditional Medicare who are enrolled in a separate stand-alone Part D plan generally pay a monthly Part D premium unless they qualify for full benefits through the Part D LIS program and are enrolled in a premium-free (benchmark) plan. In 2025, the average enrollment-weighted premium for stand-alone Part D plans is $39 per month. In 2025, most stand-alone Part D plans include a deductible, averaging $491. Plans generally impose a tiered structure to define cost-sharing requirements and cost-sharing amounts charged for covered drugs, typically charging lower cost-sharing amounts for generic drugs and preferred brands and higher amounts for non-preferred and specialty drugs, and a mix of flat dollar copayments and coinsurance (based on a percentage of a drug’s list price) for covered drugs.

The standard design of the Medicare Part D benefit currently has three distinct phases, where the share of drug costs paid by Part D enrollees, Part D plans, drug manufacturers, and Medicare varies. Based on changes in the Inflation Reduction Act, these shares changed in 2024 and 2025 (Figure 9). Most notably, the Part D benefit now includes a $2,000 out-of-pocket spending cap, meaning Part D enrollees face no additional costs once their out-of-pocket costs exceed $2,000 in 2025. Previously, enrollees with high drug costs who did not receive low-income subsidies were responsible for paying 5% of their total drug costs when they reached the catastrophic coverage phase. This new out-of-pocket spending cap is projected to help an estimated 11 million Part D enrollees in 2025, including 6.1 million enrollees not receiving low-income subsidies.

The Inflation Reduction Act of 2022, signed into law by President Biden on August 16, 2022, includes several provisions to lower prescription drug costs for people with Medicare and reduce drug spending by the federal government, including several changes related to the Part D benefit. These provisions include (but are not limited to) (Figure 10):

• Requiring the Secretary of the Department of Health and Human Services to negotiate the price of some Part D and Part B drugs covered under Medicare. The law that established the Part D benefit included a provision known as the “noninterference” clause, which prevented the HHS Secretary from being involved in price negotiations between drug manufacturers and pharmacies and Part D plan sponsors. In addition, the Secretary of HHS does not currently negotiate prices for drugs covered under Medicare Part B (administered by physicians). To date, Medicare has completed one round of price negotiation on 10 Part D drugs, with negotiated prices available in 2026, and selected 15 more Part D drugs for price negotiation in the second round, with negotiated prices available in 2027.
• Adding a hard cap on out-of-pocket drug spending under Part D, which phased in beginning in 2024, and was limited to $2,000 in 2025 (increasing to $2,100 in 2026). As noted above, under the original design of the Part D benefit, enrollees had catastrophic coverage for high out-of-pocket drug costs, but there was no limit on the total amount that beneficiaries paid out of pocket each year.  
• Limiting the out-of-pocket cost of insulin products to no more than $35 per month in all Part D plans and in Part B and making adult vaccines covered under Part D available for free as of 2023. Until these provisions took effect, beneficiary costs for insulin and adult vaccines were subject to varying cost-sharing amounts.
• Expanding eligibility for full benefits under the Part D Low-Income Subsidy program in 2024, eliminating the partial LIS benefit for individuals with incomes between 135% and 150% of poverty. Beneficiaries who receive full LIS benefits pay no Part D premium or deductible and only modest copayments for prescription drugs until they reach the catastrophic threshold, at which point they face no additional cost sharing.
• Requiring drug manufacturers to pay a rebate to the federal government if prices for drugs covered under Part D and Part B increase faster than the inflation rate, with the initial period for measuring Part D drug price increases running from October 2022-September 2023. Previously, Medicare had no authority to limit annual price increases for drugs covered under Part B or Part D. Year-to-year drug price increases exceeding inflation are not uncommon and affect people with both Medicare and private insurance.

In 2024, Medicare was estimated to spend $464 billion on benefits covered under Part A and Part B for beneficiaries in traditional Medicare. Medicare pays providers in traditional Medicare using various payment systems depending on the setting of care (Figure 11).

Medicare relies on a number of different approaches when determining payments to providers for Part A and Part B services delivered to beneficiaries in traditional Medicare. These providers include hospitals (for both inpatient and outpatient services), physicians, skilled nursing facilities, home health agencies, and several other types of providers. Of the $464 billion in estimated spending on Medicare benefits covered under Part A and Part B in traditional Medicare in 2024, $149 billion (32%) was for hospital inpatient services and $68 billion (15%) was for hospital outpatient services, $71 billion (15%) was for services covered under the physician fee schedule, and $176 billion (38%) was for all other Part A or Part B services for beneficiaries in traditional Medicare.

Medicare uses prospective payment systems for most providers in traditional Medicare. These systems generally require that Medicare pre-determine a base payment rate for a given unit of service (e.g., a hospital stay, an episode of care, a particular service). Then, based on certain variables, such as the provider’s geographic location and the complexity of the patient receiving the service, Medicare adjusts its payment for each unit of service provided. Medicare updates payment rates annually for most payment systems to account for inflation adjustments. 

The main features of hospital, physician, outpatient, and skilled nursing facility payment systems (altogether accounting for 69% of spending on Part A and Part B benefits in traditional Medicare) are described below:

• Inpatient hospitals (acute care): Medicare pays hospitals per beneficiary discharge using the Inpatient Prospective Payment System. The rate for each discharge corresponds to one of over 770 different categories of diagnoses – called Medicare Severity Diagnosis Related Groups (MS-DRGs), which reflect the principal diagnosis, secondary diagnoses, procedures performed, and other patient characteristics. DRGs that are likely to incur more intense levels of care and/or longer lengths of stay are assigned higher payments. Medicare’s payments to hospitals also account for a portion of hospitals’ capital and operating expenses.
• Medicare also makes additional payments to hospitals in particular situations. These include additional payments for rural or isolated hospitals that meet certain criteria. Further, Medicare makes additional payments to help offset costs incurred by hospitals that are not otherwise accounted for in the inpatient prospective payment system. These include add-on payments for treating a disproportionate share (DSH) of low-income patients, as well as for covering costs associated with care provided by medical residents, known as indirect medical education (IME). While not part of the Inpatient Prospective Payment System, Medicare also pays hospitals directly for the costs of operating residency programs, known as Graduate Medical Education (GME) payments.
• Physicians and other health professionals: Medicare reimburses physicians and other health professionals (e.g., nurse practitioners) based on the Physician Fee Schedule for over 10,000 services. Payment rates for these services are based on three components: (1) clinician work, (2) practice expenses, and (3) professional liability insurance (also known as medical malpractice insurance), which are measured in terms of “relative value units” (RVUs). Each component is adjusted to account for differences across geography and then multiplied by a conversion factor. Payment rates for individual services may be updated each year based in part on the recommendations of the AMA/Specialty Society RVS Update Committee (RUC), a volunteer committee of physicians and other professionals overseen by the American Medical Association (AMA). CMS also makes annual updates to the conversion factor based on statutory factors, as well as adjustments to preserve budget neutrality, which may result in payment cuts for physicians and other clinicians whenever the projected cost of all Physician Fee Schedule spending is expected to increase by more than $20 million for the year.
• Payment rates specified under the Physician Fee Schedule are subject to further adjustments under the Quality Payment Program, established by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). Clinicians can receive payment increases if they participate in qualified advanced alternative payment models (A-APMs), which bear some financial risk for the costs of patient care, while those who participate in the Merit-based Incentive Payment System (MIPS) may receive payment increases or decreases (or no change) depending on their performance on specific quality measures. (See “What Is Medicare Doing to Promote Alternative Payment Models?” for more information about alternative payment models in Medicare.)
• While not part of the Physician Fee Schedule, Medicare also pays for a limited number of drugs that physicians and other health care providers administer. For drugs administered by physicians, which are covered under Part B, Medicare reimburses providers based on a formula set at 106% of the Average Sales Price (ASP), which is the average price to all non-federal purchasers in the U.S, inclusive of rebates (other than rebates paid under the Medicaid program).

• Hospital outpatient departments: Medicare pays hospitals for ambulatory services provided in outpatient departments, using the Hospital Outpatient Prospective Payment System, based on the classification of individual services into Ambulatory Payment Classifications (APC) with similar characteristics and expected costs. Final determination of Medicare payments for outpatient department services is complex. It incorporates both individual service payments and payments “packaged” with other services, partial hospitalization payments, as well as numerous exceptions, such as payments for new technologies. Medicare payment rates for services provided in hospital outpatient departments are typically higher than for similar services provided in physicians’ offices, and evidence indicates that providers have shifted the billing of services to higher-cost settings. There is bipartisan interest in proposals to expand so-called “site-neutral” payments, meaning that Medicare would align payment rates for the same service across settings.
• Skilled Nursing Facilities (SNFs): SNFs are freestanding or hospital-based facilities that provide post-acute inpatient nursing or rehabilitation services. Medicare pays SNFs based on the Skilled Nursing Facility Prospective Payment System, and payments to SNFs are determined using a base payment rate, adjusted for geographic differences in labor costs, case mix, and, in some cases, length of stay. Daily rates consider six care components – nursing, physical therapy, occupational therapy, speech–language pathology services, nontherapy ancillary services and supplies, and non–case mix (room and board services).

Medicare Advantage. Medicare pays firms offering Medicare Advantage plans a set monthly amount per enrollee. The payment is determined through an annual process in which plans submit “bids” for how much they estimate it will cost to provide benefits covered under Medicare Parts A and B for an average beneficiary. The bid is compared to a county “benchmark”, which is the maximum amount the federal government will pay for a Medicare Advantage enrollee and is a percentage of estimated spending in traditional Medicare in the same county, ranging from 95 percent in high-cost counties to 115 percent in low-cost counties. When the bid is below the benchmark in a given county, plans receive a portion of the difference (the “rebate”), which they must use to lower cost sharing, pay for extra benefits, or reduce enrollees’ Part B or Part D premiums. Payments to plans are risk adjusted, based on the health status and other characteristics of enrollees, including age, sex, and Medicaid enrollment. In addition, Medicare adopted a quality bonus program that increases the benchmark for plans that receive at least four out of five stars under the quality rating system, which increases plan payments.

Generally, Medicare pays more to private Medicare Advantage plans for enrollees than their costs would be in traditional Medicare. The Medicare Payment Advisory Commission (MedPAC) reports that while it costs Medicare Advantage plans 83% of what it costs traditional Medicare to pay for Medicare-covered services, plans receive payments from CMS that are 120% of spending for similar beneficiaries in traditional Medicare, on average. The higher spending stems from features of the formula used to determine payments to Medicare Advantage plans, including setting benchmarks above traditional Medicare spending in half of counties and higher benchmarks due to the quality bonus program, resulting in bonus payments of at least $12.7 billion in 2025. This amount is four times greater than spending on bonus payments in 2015 (Figure 12).

The higher spending in Medicare Advantage is also related to the impact of coding intensity, where Medicare Advantage enrollees look sicker than they would if they were in traditional Medicare, resulting in plans receiving higher risk adjustments to their monthly per person payments, translating to an estimated $84 billion in excess payments to plans in 2025.

Higher payments to Medicare Advantage plans allow them to offer extra benefits attractive to enrollees. However, these benefits come at a cost to all beneficiaries through higher Part B premiums – amounting to $13 billion in 2025 alone – and contribute to the strain on the Medicare Part A Hospital Insurance Trust Fund. (See “How Much Does Medicare Spend and How Is the Program Financed?” for additional information .)

Medicare Part D. Medicare pays Part D plans, both stand-alone prescription drug plans and Medicare Advantage plans that offer drug coverage, based on an annual competitive bidding process. Plans submit bids yearly to Medicare for their expected costs of providing the drug benefit plus administrative expenses. Plans receive a direct subsidy per enrollee, which is risk-adjusted based on the health status of their enrollees, plus reinsurance payments from Medicare for the highest-cost enrollees and adjustments for the low-income subsidy (LIS) status of their enrollees. (Unlike Medicare Advantage, there is no quality bonus program that provides higher payments to Part D plans with higher Part D quality ratings.) Risk-sharing arrangements with the federal government (“risk corridors”) limit plans’ potential total losses or gains.

Under reinsurance, Medicare subsidizes 20% of total drug spending incurred by Part D enrollees with relatively high drug spending above the catastrophic coverage threshold, as of 2025, down from 80% in prior years, based on a provision of the Inflation Reduction Act. This provision was designed to shift more of the responsibility for catastrophic drug costs to Part D plans and drug manufacturers. Plans now pay 60% of total drug costs above the catastrophic threshold, up from 15% to 20% in prior years. (See “What Is the Medicare Part D Prescription Drug Benefit?” for more detail on plan liability under various phases of the Part D benefit and more information on changes to Part D included in the Inflation Reduction Act.) In the aggregate, Medicare’s reinsurance payments to Part D plans in 2025 are estimated to account for 18% of total Part D spending, down from close to half of total Part D spending (46%) in 2024 (Figure 13).

For 2025, Medicare’s actuaries estimate that Part D plans will receive direct subsidy payments averaging $1,855 per enrollee overall, $1,313 for enrollees receiving the LIS, and $517 in reinsurance payments for very high-cost enrollees.

While Medicare has traditionally paid providers on a fee-for-service basis, the program is implementing various alternative payment models designed to tie payments under traditional Medicare to provider performance on quality and spending. Although the overarching goals of these various models are similar—improving the quality and affordability of patient care, increasing coordination between care teams, and reducing health care costs—the specific aims vary by model.

A notable example of an alternative payment model within Medicare is the Medicare Shared Savings Program (MSSP), a permanent accountable care organization (ACO) program in traditional Medicare established by the Affordable Care Act (ACA) that offers financial incentives to providers for meeting or exceeding savings targets and quality goals. ACOs are groups of doctors, hospitals, and other health care providers who voluntarily form partnerships to collaborate and share accountability for the quality and cost of care delivered to their patients. The MSSP currently offers different participation options to ACOs, allowing these organizations to share in savings only or both savings and losses, depending on their level of experience and other factors.

ACOs have a defined patient population for the purpose of calculating annual savings or losses. Beneficiaries in traditional Medicare may choose to align themselves to an ACO (voluntary alignment) or may be assigned to a particular ACO based on where they received a plurality of their primary care services. In either case, beneficiaries are free to seek treatment from any provider who accepts Medicare and are not limited to ACO-affiliated providers. This contrasts with enrollment in Medicare Advantage, where beneficiaries are generally limited to seeing providers in their plan’s network or face higher out-of-pocket costs for seeing out-of-network providers.

In 2023, the Medicare Shared Savings Program saved Medicare an estimated $2.1 billion relative to annual spending targets. As of 2025, there are 476 MSSP ACOs nationwide, with over 643,000 participating clinicians and 10.8 million beneficiaries aligned to MSSP ACOs (Figure 14).

The ACA also established the Center for Medicare and Medicaid Innovation (CMMI, also known as the Innovation Center), an operating center within the Centers for Medicare & Medicaid Services tasked with designing and testing alternative payment models to address concerns about rising health care costs, quality of care, and inefficient spending within the Medicare, Medicaid, and CHIP programs. Since its start in 2010, CMMI has launched more than 80 models across six different categories, including accountable care models, disease-specific models, health plan models, and others (Figure 15). CMMI models are designed to be tested over a limited number of years, but Congress gave CMMI the authority to expand models nationwide permanently if they meet certain quality and savings criteria. As of the most recent estimate, six models have shown statistically significant savings, and four have met the requirements for permanent expansion into the wider Medicare program, including the Medicare Diabetes Prevention Program and the Home Health Value-Based Purchasing Model.

While the overall aims of CMMI are set in law, changes of administration have brought about changes in the strategic direction of the Innovation Center and the types of models that have been pursued, along with the reframing or termination of certain models from the previous administration. For example, the Biden administration placed a greater emphasis on health equity in CMMI models, while the second Trump administration is prioritizing evidence-based preventive care, empowering consumers with data and information to make health decisions, and promoting choice and competition in health care markets.

According to the Congressional Budget Office (CBO), the activities of CMMI increased federal spending by $5.4 billion from 2011 to 2020, which CBO attributes in part to the mixed success of many models at generating sufficient savings to offset their high upfront costs. (CBO had initially projected that CMMI would reduce federal spending by $2.8 billion in its first decade of operation.) However, evidence suggests that savings vary by model type, with the greatest savings found among state and community-based models. Further, a review of select CMMI models provides evidence of improvements in care coordination, team-based care, and other care delivery changes, even in the absence of savings. CBO projects that CMMI’s activities will come closer to the breakeven point regarding federal spending over the course of the current decade (2024-2033).

Spending. Medicare plays a significant role in the health care system, accounting for 21% of total national health spending in 2023, a quarter of spending on both hospital care and physician and clinical services, and 32% of spending on retail prescription drug sales (Figure 16).

In 2024, Medicare spending, net of income from premiums and other offsetting receipts, totaled $910 billion and accounted for 13% of the federal budget — a similar share as spending on Medicaid, the ACA, and the Children’s Health Insurance Program combined, and defense spending (Figure 17).

In 2025, Medicare benefit payments are estimated to total $1.1 trillion, up from $632 billion in 2015 (including spending for Part A, Part B, and Part D benefits in both traditional Medicare and Medicare Advantage). Medicare spending per person has also grown, increasing from $5,800 to $16,700 between 2000 and 2023 – or 4.7% average annual growth over the 23-year period. In recent years, however, growth in spending per person has been lower in Medicare than in private health insurance .

Spending on Medicare Part A benefits (mainly hospital inpatient services) has decreased as a share of total Medicare spending over time as care has shifted from inpatient to outpatient settings, leading to an increase in spending on Part B benefits (including physician services, outpatient services, and physician-administered drugs). Spending on Part B services now accounts for the largest share of Medicare benefit spending (50% in 2024) (Figure 18). Moving forward, Medicare spending on physician services and other services covered under Part B is expected to grow to more than half of total Medicare spending by 2034, while spending on hospital care and other services covered under Part A is projected to decrease further as a share of the total.

Payments to Medicare Advantage plans for Part A and Part B benefits tripled as a share of total Medicare spending between 2014 and 2024, from $156 billion to $462 billion, partly due to steady enrollment growth in Medicare Advantage plans. Growth in spending on Medicare Advantage also reflects that Medicare pays more to private Medicare Advantage plans for enrollees than their costs in traditional Medicare, on average. (See “How Does Medicare Pay Private Plans in Medicare Advantage and Medicare Part D?” for additional information.) These higher payments have contributed to growth in spending on Medicare Advantage and overall Medicare spending. In 2024, half of all Medicare program spending for Part A and Part B benefits was for Medicare Advantage plans, up from just under 30% in 2014. Between 2024 and 2034, Medicare Advantage payments are projected to total close to $9 trillion, $2.5 trillion more than spending under traditional Medicare (Figure 19).

Financing. Medicare funding, which totaled $1.1 trillion in 2024, comes primarily from government contributions (44%), payroll tax revenues (35%), and premiums paid by beneficiaries (15%). Other sources include taxes on Social Security benefits, payments from states, and interest.

The different parts of Medicare are funded in varying ways, and revenue sources dedicated to one part of the program cannot be used to pay for another part (Figure 20).

• Part A, which covers inpatient hospital stays, skilled nursing facility (SNF) stays, some home health visits, and hospice care, is financed primarily through a 2.9% tax on earnings paid by employers and employees (1.45% each). Higher-income taxpayers (more than $200,000 per individual and $250,000 per couple) pay a higher payroll tax on earnings (2.35%). Payroll taxes accounted for 88% of Part A revenue in 2024.
• Part B, which covers physician visits, outpatient services, preventive services, and some home health visits, is financed primarily through a combination of government contributions (72% in 2024) and beneficiary premiums (26%) (and 2% from interest and other sources). The standard Part B premium that most Medicare beneficiaries pay is calculated as 25% of annual Part B spending, while beneficiaries with annual incomes over $106,000 per individual or $212,000 per couple pay a higher, income-related Part B premium reflecting a larger share of total Part B spending, ranging from 35% to 85%.
• Part D, which covers outpatient prescription drugs, is financed primarily by government contributions (75%) and beneficiary premiums (13%), with an additional 12% of revenues coming from state payments for beneficiaries enrolled in both Medicare and Medicaid. Higher-income enrollees pay a larger share of the cost of Part D coverage, as they do for Part B.
• The Medicare Advantage program (sometimes referred to as Part C) does not have its own separate revenue sources. Funds for Part A benefits provided by Medicare Advantage plans are drawn from the Medicare HI trust fund. Funds for Part B and Part D benefits are drawn from the Supplementary Medical Insurance (SMI) trust fund. Beneficiaries enrolled in Medicare Advantage plans pay the Part B premium and may pay an additional premium if required by their plan. In 2025, 76% of Medicare Advantage enrollees pay no additional premium.

Measuring the level of reserves in the Medicare Hospital Insurance trust fund, out of which Part A benefits are paid, is a common way of measuring Medicare’s financial status. Each year, Medicare’s actuaries provide an estimate of the year when the reserves are projected to be fully depleted. In 2025, the Medicare Trustees projected sufficient funds would be available to pay for Part A benefits in full until 2033, 8 years from now – three years earlier than the 2024 projection. At that point, in the absence of Congressional action, Medicare will be able to pay 89% of costs covered under Part A using payroll tax revenues. At the same time, the Congressional Budget Office has recently updated its projection of the Part A trust fund, extending the year of trust fund depletion to 2052, based on changes in its projections of Part A spending and revenues and a change in CBO’s modeling related to graduate medical education payments. OACT projects both lower income and higher spending under Part A than CBO, as well as faster Part A spending growth, which helps to account for the difference in the projected HI trust fund depletion dates.

Since 2010, the projected year of trust fund reserve depletion, based on projections by Medicare’s actuaries, has ranged from 5 years out (in 2021) to 19 years out (in 2010) (Figure 21).

The level of reserves in the Part A Trust Fund is affected by growth in the economy, which affects revenue from payroll tax contributions, health care spending and utilization trends, and demographic trends: an increasing number of beneficiaries as the population ages, especially between 2010 and 2030 when the baby boom generation reaches Medicare eligibility age, and a declining ratio of workers per beneficiary making payroll tax contributions. 

Part B and Part D do not have financing challenges similar to Part A, because both are funded by beneficiary premiums and government contributions that are set annually to match expected outlays. However, future increases in spending under Part B and Part D will require increases in government (and taxpayer) funding and higher premiums paid by beneficiaries.

Looking to the future, Medicare faces a number of challenges from the perspective of beneficiaries, health care providers and private plans, and the federal budget. These include:

• How best to address the fiscal challenges arising from an aging population and increasing health care costs through spending reductions and/or revenue increases.
• Whether and how to improve coverage for Medicare beneficiaries, including an out-of-pocket limit in traditional Medicare, enhanced financial support for lower-income beneficiaries, and additional benefits, such as dental and vision.
• How to control spending while ensuring fair and adequate payments to hospitals, physicians and other providers, and Medicare Advantage plans, including whether and how to reduce overpayments to Medicare Advantage plans.
• How to address the implications for traditional Medicare of the predominant role that Medicare Advantage now plays in covering Medicare beneficiaries.

Any potential changes to Medicare to address these challenges could have implications for federal spending and taxpayers, the solvency of the Medicare Hospital Insurance trust fund, total health care spending, the affordability of health care for Medicare’s growing number of beneficiaries, many of whom have limited incomes, and access to high-quality medical care.

• What to Know about Medicare Spending and Financing
• A Current Snapshot of the Medicare Part D Prescription Drug Benefit
• Medicare Advantage in 2025: Enrollment Update and Key Trends 
• Key Facts About Medicare Part D Enrollment, Premiums, and Cost Sharing in 2025 
• What to Know about the Medicare Open Enrollment Period and Medicare Coverage Options
• Explaining the Prescription Drug Provisions in the Inflation Reduction Act
• A Snapshot of Sources of Coverage Among Medicare Beneficiaries
• Medicare Advantage Quality Bonus Payments Will Total at Least $12.7 Billion in 2025
• FAQs about the Inflation Reduction Act’s Medicare Drug Price Negotiation Program
• How Many Physicians Have Opted Out of the Medicare Program?
• The Facts About Medicare Spending
• Medicare Part D in 2025: A First Look at Prescription Drug Plan Availability, Premiums, and Cost Sharing
• Medicare Advantage 2025 Spotlight: A First Look at Plan Offerings 
• Income and Assets of Medicare Beneficiaries
• What to Know About How Medicare Pays Physicians 
• Medicare Advantage Insurers Made Nearly 50 Million Prior Authorization Determinations in 2023 
• Implementation Dates for 2025 Reconciliation Law 
• Health Provisions in the 2025 Reconciliation Law 

Cubanski, J., Freed, M., Ochieng, N., Cottrill, A., Fuglesten Biniek, J., & Neuman, T., Medicare 101. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-medicare/ (date accessed).

Health and health care disparities refer to preventable differences in health and health care among groups that stem from broader social and economic factors. Despite the recognition of disparities for decades and overall improvements in population health over time, many disparities persist, and in some cases, have widened over time. Disparities limit the overall health of the nation and result in unnecessary costs. This chapter provides an overview of what health and health care disparities are, the factors that drive them, the status of racial and ethnic health and health care disparities today, how recent federal actions may impact disparities, and future considerations. The information and data included in this chapter are current as of July 2025.

In the wake of the COVID-19 pandemic and racial reckoning following the murders of George Floyd and others, the federal government as well as many states and private entities increased efforts focused on addressing health disparities. Since taking office, the Trump administration has taken a range of actions to eliminate federal diversity and disparities-related initiatives, restructured and eliminated federal staff and offices that played key roles in identifying and addressing disparities, and implemented policies focused on restricting immigration and increasing interior enforcement to support mass deportation of immigrants. Moreover, the 2025 federal budget reconciliation law makes large cutbacks to federal spending for Medicaid and the Affordable Care Act’s (ACA’s) provisions. These actions will likely lead to widening disparities in health and health care going forward.

Health and health care disparities refer to preventable differences in health and health care among groups that stem from broader social and economic factors. There are multiple definitions of health disparities. The Centers for Disease Control and Prevention (CDC) defines health disparities as “preventable differences that populations experience in the burden of disease, injury, violence, or opportunities.” A health care disparity typically refers to differences between groups in health insurance coverage, affordability, access to and use of care, and quality of care. The terms “health inequality” and “inequity” also are used to describe differences that stem from systemic and unjust or inequitable social and economic policies. Racism, which the CDC previously defined as a system that includes structural, institutional, interpersonal, and internalized racism that assigns value and determine opportunities based on the way people look or the color of their skin, results in conditions that unfairly advantage some and disadvantage others. Racism and discrimination at all levels, intentional or not, contribute to differences in experiences across many aspects of everyday life as well as in health care settings, which can negatively impact people’s health and well-being.

Reflecting the intersectional nature of people’s identities, some individuals experience disparities across multiple dimensions beyond race and ethnicity such as citizenship, sexual orientation and gender identity, and disability status.  Disparities also occur within subgroups of broader racial and ethnic groups, such as gender, ethnic identity, immigration status, and English proficiency. For example, a KFF survey shows that Black women report more pervasive negative experiences in health care settings compared to other groups. These groups are not mutually exclusive and often intersect in meaningful ways.  The Healthcare Research and Quality Act of 1999, which established an Office of Priority Populations within the Agency for Healthcare Research and Quality (AHRQ) identifies designated priority populations, including “low-income populations, racial/ethnic minorities, maternal health, women, children/adolescents, elderly, and individuals with special health care needs.” The National Institute on Minority Health and Health Disparities, established under the Minority Health and Health Disparities Research and Education Act also has designated populations with health disparities, including “racial and/or ethnic minority populations, low socioeconomic status, underserved rural populations, people with disabilities, and sexual minority groups.”

Health equity generally refers to individuals achieving their highest level of health through the elimination of disparities in health and health care. The CDC describes health equity as when everyone has a fair and just opportunity to be as healthy as possible. The World Health Organization (WHO) states that “health equity is achieved when everyone can attain their full potential for health and well-being.” The WHO defines equity as the absence of unfair and avoidable differences among groups, regardless of their identity, where they live, and other social and economic factors. The terms health equity and equality both refer to efforts to achieve better health outcomes and access to health care services for all groups. While health equality refers to providing all people with the same resources and opportunities, it does not account for people’s different underlying needs or circumstances that may affect their ability to achieve optimal health outcomes and health care access.

The U.S. has a long history of policies and events that have resulted in stark differences in access to resources, opportunities, and power that contribute to racial and ethnic disparities in health today. Dating back to slavery and colonization of the Americas, people of color have been subject to abuse and mistreatment, including medical exploitation and experimentation, family separation, and efforts to eliminate cultural practices and languages. Historical discriminatory policies, such as redlining, have lasting effects today, leading to residential segregation of Black and Hispanic people into urban neighborhoods with more limited resources and increased health risks, including climate-related risks. Within medicine, disproven beliefs about biological differences by race persist today and have led to race permeating clinical decision making and treatment in multiple ways, including through providers’ attitudes and implicit biases, disease stereotyping and clinical nomenclature, and its use in clinical algorithms, tools, and treatment guidelines. Similarly, historical anti-immigrant policies have excluded and discriminated against certain groups, contributing to “othering” and “perpetual foreigner” stereotypes, particularly among Asian immigrants, with a resurgence in anti-Asian rhetoric amid the COVID-19 pandemic. Policies, such as the 1996 Welfare Reform Law, have restricted access to public assistance programs, including health coverage, contributing to persistent disparities in health coverage and care for immigrants today, who are disproportionately Hispanic or Asian.

Underlying inequities in social and economic factors that reflect historical and contemporary policies drive racial and ethnic disparities in health (Figure 1). Though health care is essential to health, studies suggest that social and economic factors, often referred to as  social determinants of health, are the primary drivers of health outcomes. These include factors such as access to housing, food, and economic and educational opportunities. Hispanic, Black, AIAN, and NHPI people fare worse compared to White people across many social and economic factors. Experiences for Asian people are mixed, although some subgroups of Asian people fare worse compared to White people. Asian immigrants face certain additional challenges.

Experiences with unfair treatment and discrimination negatively impact health and well-being. Despite growing calls to address racism in the wake of the COVID-19 pandemic and the accompanying racial reckoning, many adults continue to experience unfair treatment and discrimination in their daily lives and in health care settings. A 2023 KFF survey finds that at least half of AIAN (58%), Black (54%), Hispanic adults (50%), and about 4 in 10 Asian adults (42%) say they experienced at least one type of discrimination in daily life in the past year. These experiences include receiving poorer service than others at restaurants or stores; people acting as if they are afraid of them or as if they aren’t smart; being threatened or harassed; or being criticized for speaking a language other than English. Consistent with other research, which shows that racism has negative effects on mental health and results in certain negative physical health outcomes, among those with discrimination experiences, 4 in 10 (40%) say they “always” or “often” felt anxious in the past year, compared to 14% of adults who rarely or never experience such discrimination (Figure 2). Similarly, those with experiences of discrimination in their daily life are more than three times as likely as others to say they always or often felt lonely (26% vs. 7%) or depressed (25% vs. 7%) in the past year.

Racism and discrimination also negatively affect people’s health care experiences. KFF survey data also show that Black, Hispanic, AIAN, and Asian adults report higher levels of unfair treatment when seeking health care than their White counterparts and are more likely to report having certain negative experiences with a health care provider because of their race and ethnicity (Figure 3). About a quarter of adults who experienced unfair treatment, a negative experience with a provider, or a language access challenge say it led to worse health, being less likely to seek care, and/or switching providers. Similarly, as of 2023, one in four (25%) immigrant adults said that they were treated unfairly by a health care provider in the U.S., including nearly four in ten (38%) Black immigrant adults.

Addressing disparities in health and health care is important not only from an equity standpoint but also for improving the nation’s overall health and economic prosperity. Racial and ethnic health and health care disparities result in higher rates of illness and death across a wide range of health conditions, limiting the overall health of the nation. Research further finds that health disparities are costly, resulting in excess medical care costs and lost productivity, as well as additional economic losses due to premature deaths each year.

It is increasingly important to address health disparities as the population becomes more diverse and stark income inequalities persist (Figure 4). The population has become increasingly racially diverse, reflecting shifting immigration patterns, a growing multiracial population, as well as adjustments to how the U.S. Census Bureau measures race and ethnicity. The U.S. Census Bureau projects that people of color will account for over half (52%) of the population in 2050, with the largest growth occurring among people who identify as Asian or Hispanic. Income inequality within the U.S. has also widened over time. As of 2023, the top 10% of households in the U.S. had incomes above $216,000 compared with incomes at or below $17,100 among the lowest 10% of households.

Major recognition of health disparities began nearly four decades ago. In 1985, the Report of the Secretary’s Task Force on Black and Minority Health (commonly known as the Heckler Report) documented persistent health disparities that accounted for 60,000 excess deaths each year and synthesized ways to advance health equity. The Heckler Report led to the creation of the Office of Minority Health within the Department of Health and Human Services (HHS) (which was reportedly shut down by the Trump administration as part of the HHS staff restructuring and reductions) and influenced federal recognition of and investment in many aspects of health equity. In 2003, the Institute of Medicine’s Unequal Treatment: Confronting Racial and Ethnic Disparities in Health Care report was issued, which identified systemic racism as a major cause of health disparities in the United States.

Despite the recognition and documentation of disparities for decades and overall improvements in population health over time, many disparities persist, and in some cases, have widened over time .Analysis across a broad range of health measures finds that Black and AIAN people fare worse than their White counterparts across half or more of these measures. Data for Hispanic people are more mixed relative to White people, with them faring better on some measures but worse on others. In the aggregate, Asian people fare the same or better than White people on many measures of health, although this finding masks disparities among subgroups of the population. Data gaps limit the ability to examine disparities among NHPI people; where data are available, they point to disparities, particularly for certain subgroups of this population. Overall, Black, Hispanic, and AIAN people fare worse compared to White people across many measures of health outcomes including:

• AIAN and Black people had a shorter life expectancy at birth compared to White people based on provisional data from 2022. Life expectancy for Black people was about five years shorter than White people (72.8 vs. 77.5), and nearly ten years shorter for AIAN people (67.9).
• AIAN, Hispanic, and Black people experienced larger declines in life expectancy than White people between 2019 and 2021, largely reflecting an increase in excess deaths due to COVID-19.
• NHPI people had the highest age adjusted mortality rates for diabetes among all racial and ethnic groups at 49.6 per 100,000 deaths. The age-adjusted mortality rates for diabetes for AIAN (41.5 per 100,000) and Black people (39.1 per 100,000) were about twice as high as the rate for White people (19.8 per 100,000); Hispanic people (26.5 per 100,000) also had a higher diabetes death rate compared to White people in 2023. Although Black people did not have higher cancer incidence rates than White people overall and across most types of cancer, they had the highest overall cancer-related mortality rate as of 2022. Black people (165 per 100,000 deaths) were more likely to die from cancer than White people (148.4 per 100,000), and NHPI people had a slightly lower overall cancer-related mortality rate (141.4) to White people in 2022.
• Black infants were more than two times as likely to die as White infants (10.9 vs. 4.5 per 1,000 live births) as of 2023. AIAN infants (9.1 per 1,000) were roughly twice as likely to die as White infants (Figure 5). Hispanic infants (4.9 per 1,000) also had a slightly higher mortality rate than White infants in 2023.
• AIAN (118.7 per 100,000), NHPI (111.7 per 100,000), and Black (69.3 per 100,000) women also had the highest rates of pregnancy-related mortality in 2021

There are also ongoing racial and ethnic disparities in health coverage and access to care.  Despite large gains in coverage across groups since the ACA coverage expansions were implemented in 2014, as of 2022, nonelderly AIAN, Hispanic, Black, and NHPI people were more likely to be uninsured compared to their White counterparts (Figure 6). There are also large coverage disparities by immigration status, with a 2023 KFF/LA Times Survey of Immigrants showing that about one in five (18%) lawfully present immigrant adults and half (50%) of likely undocumented immigrant adults reported being uninsured as compared to less than one in ten citizens. In addition, Hispanic, Black, Asian, AIAN, and NHPI adults are more likely than White adults to report not having a personal health care provider, and Hispanic, Black, AIAN, and NHPI adults are more likely than White adults to report not seeing a doctor in the past 12 months because of cost.

In the wake of the COVID-19 pandemic and racial reckoning following the murders of George Floyd and others, the federal government as well as many states and private entities increased efforts focused on addressing health disparities. This increased focus led to the development of programs and initiatives focused on mitigating disparities, including efforts to address disparities in maternal and infant health, cancer, and chronic disease, as well as other efforts, such as increasing diversity in clinical trials for development of new drugs and devices. Research efforts also increased to understand disparities, the factors driving them, and effective interventions to mitigate them.

The Biden administration issued a series of executive orders and other efforts to advance health equity.  These included orders that outlined equity as a priority for the federal government, equity as a central part of the pandemic response and recovery efforts, and also directed federal agencies to develop Equity Action Plans. HHS’ equity action plan outlined a series of strategies that included efforts to improve access and address barriers to quality and affordable health care; prioritize behavioral health for underserved populations; and improve maternal health outcomes for rural, Tribal, and underserved racial and ethnic groups. HHS also enacted its climate action plan, including establishing the Office of Climate Change and Health Equity to address the impacts of climate change on health outcomes and health equity.  The administration released a Blueprint for Addressing the Maternal Health Crisis, a whole government approach to combatting maternal mortality and morbidity with a focus on reducing disparities in maternal health outcomes and improving overall pregnancy, birth, and postpartum outcomes. Federal efforts were also made to increase the availability of disaggregated data for smaller population groups, including AIAN and NHPI people, to understand and address the health and heath care disparities they face. During his term, President Biden reversed public charge regulations from the Trump administration’s first term to reduce fears about participating in programs, including Medicaid and the Children’s Health Insurance Program.

As one of his first actions in office, President Trump signed executive orders revoking federal diversity, equity, inclusion, and accessibility (DEIA) related programs and actions in the federal government and among federal contractors and grantees.  In implementing President Trump’s executive orders, the administration has taken significantly broader actions beyond eliminating DEI programs to eliminate priorities, actions, information, data, and funding related to concepts of diversity or disparities among federal agencies as well as federal contractors and grantees.The Office of Personnel Management directed agencies and departments to take down all outward facing media that “inculcate or promote” “gender ideology,” as well as to remove all public facing DEI related websites and content. This resulted in the temporary shutdown of websites and removal of key health datasets. While some web pages and datasets began returning in several days, they included a warning message that they were being modified to comply with President Trump’s executive orders and some materials, such as codebooks and questionnaires, did not immediately return. The administration also directed departments and agencies to pause grants provided to federal contractors to identify and review programs and activities for consistency with the President’s policies. Reports indicate that the administration flagged over 100 words that federal agencies should limit or avoid to comply with the President’s policies, including disparities, diversity, equity, and race; that the CDC ordered the withdrawal of papers pending publication to ensure language compliance; and that research grants were terminated to comply with new restrictions. As part of efforts to eliminate diversity and disparities related initiatives the administration also eliminated environmental justice actions and programs

The administration also eliminated about 10,000 employees from HHS, including many of those focused on addressing disparities as part of a restructuring effort. The HHS Office of Minority Health, CDC’s Office of Health Equity, the Office of Women’s Health, and the Office for Civil Rights are among the offices facing partial or complete cuts. The impact of these cuts is compounded by the loss of population-specific initiatives and offices. The administration’s proposed budget cuts to the Indian Health Services (IHS) and HHS include $900 million in cuts to the IHS budget and eliminating advanced appropriations.  In addition to eliminating staff directly working on disparities, other cuts were made that will have important implications for disparities. The restructuring cut jobs from the CDC’s National Center for Chronic Disease Prevention and Health Promotion, which has resulted in the termination of programs focused on diabetes, obesity, dementia, and kidney disease, which disproportionately affect people of color. The HHS restructuring has also impacted federal maternal and infant health programs, including layoffs of most staff at the CDC’s Division of Reproductive Health, which serves to provide data, research, and assistance to states “on issues related to reproductive health, maternal health, and infant health.” These staff cuts are accompanied by the suspension of the Pregnancy Risk Assessment Monitoring System, which has documented disparities in maternal mortality and morbidity for 38 years.

The actions to eliminate diversity and disparities related initiatives will likely lead to widening disparities, reversing recent efforts to advance health equity. Elimination of focused efforts to address health disparities will potentially further exacerbate disparities, contributing to worsening overall health and unnecessary health care costs. Focused plans and initiatives to mitigate health disparities seek to address the underlying inequities that drive disparities and meet the needs and preferences of diverse populations. In the absence of focused efforts, disparities will likely widen because the underlying inequities that contribute to them persist. Additionally, the elimination of information, data, and research will inhibit the ability to identify disparities and understand the factors driving them. Data are essential for identifying where disparities exist, directing efforts and resources to address disparities as they are identified, measuring progress toward achieving greater equity, and establishing accountability for achieving progress. Without adequate data and research, disparities may remain unseen and unaddressed.

The Trump administration has also made immigration policy changes focused on restricting entry at the border and increasing interior enforcement efforts to support mass deportation, which may contribute to widening disparities among immigrant families. Research suggests that these policies negatively affect the health and well-being of immigrant families, including citizen children living in these families. KFF survey data from 2025 show that immigrants’ worries about detention or deportation have risen sharply since 2023, even among lawfully present immigrants and naturalized citizens, and many say these worries are affecting their health. Moreover, accompanying KFF focus groups  found that immigration policies and actions undertaken by the Trump administration have led to increased fears, uncertainty, and financial hardships among immigrant families across immigration statuses that have had negative effects on their daily lives, health, and well-being, including negative mental health impacts on them and their children. Efforts to restrict immigration not only impact the health and well-being of immigrant families, but can also negatively impact the U.S. economy and workforce, given the role immigrants play, particularly in certain industries such as health care, construction, and agriculture.

Under the recently passed budget reconciliation law there are large cuts to federal spending for Medicaid and the ACA, which will likely lead to widening racial and ethnic disparities in health coverage and, in turn, exacerbate disparities in access to care. Medicaid is a major source of coverage for people of color, helping to fill gaps in employer sponsored coverage, particularly for children (Figure 7). The ACA’s coverage expansions through Medicaid and the Marketplaces contributed to large gains in health coverage across racial and ethnic groups and reduced racial disparities in coverage. The law includes substantial cuts to federal Medicaid spending and changes to the ACA, which the Congressional Budget Office projects will increase the number of uninsured by about 10 million by 2034. The law includes provisions that eliminate eligibility for Medicaid, subsidized ACA Marketplace, and Medicare coverage for many lawfully present immigrants. In addition to reductions in the legislation, the scheduled expiration of tax credits for Marketplace coverage in 2025 and recent Trump administration regulatory changes that make it harder to sign up for ACA coverage are expected to further increase the growth in the uninsured by millions.  Coverage losses, particularly in Medicaid, would widen racial and ethnic disparities in coverage given that larger shares of people of color are covered by the program. In turn, widening disparities in coverage would likely contribute to gaps in access to care and ultimately health outcomes.

Looking to the future, racial and ethnic disparities in health and health care remain a persistent problem, particularly as longstanding efforts to recognize and address them are being dismantled. These disparities are rooted in the ongoing impacts of racism and discrimination, which contribute to structural inequities in access to resources, opportunities, and health care as well as bias within health systems and daily life. As efforts to advance health equity face increasing challenges some key issues include:

How to mitigate bias and disparate treatment in the medical system, amid the growing use of AI and data-driven tools in health care and perpetuation of disproven beliefs about biologic differences by race.

How rollbacks to federal disparities initiatives and DEI programs will impact long term efforts to address disparities in health.

How to close racial and ethnic gaps and prevent further widening of disparities in health coverage and access to care amid efforts to cut Medicaid and other public programs.

What data and research will remain available to identify and understand disparities and develop interventions to address them.

How uneven impacts of climate change and climate-related health risks may impact disparities amid the rollbacks of federal environmental justice efforts.

• Survey on Racism, Discrimination and Health: Experiences and Impacts Across Racial and Ethnic Groups
• Health and Health Care Experiences of Immigrants: The 2023 KFF/LA Times Survey of Immigrants
• Disparities in Health and Health Care: 5 Key Questions and Answers
• Key Data on Health and Health Care by Race and Ethnicity
• Health Coverage by Race and Ethnicity, 2010-2022
• What is Driving Widening Racial Disparities in Life Expectancy?
• Racial Disparities in Maternal and Infant Health: Current Status and Efforts to Address Them
• Key Facts on Health Coverage of Immigrants
• Climate Change and Health Equity: Key Questions and Answers
• Medicaid and Racial Health Equity
• How History Has Shaped Racial and Ethnic Health Disparities: A Timeline of Policies and Events

Ndugga, N., Pillai, D., Hill, L., & Artiga, S., Race, Inequality, and Health. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-race-inequality-and-health/ (date accessed).

While there is currently no standard, agreed-upon definition of global health, the National Academy of Medicine (formerly Institute of Medicine) defines global health as having “the goal of improving health for all people in all nations by promoting wellness and eliminating avoidable diseases, disabilities, and deaths.” A key dimension of global health is an emphasis on addressing inequities in health status between rich and poor countries and also for those who are most marginalized within countries, as well as a recognition that the health of people around the world is highly interconnected, with domestic and foreign health inextricably linked. 

The U.S. government has long been the largest donor to and implementer of global health programs in the world. These efforts have aimed to help improve the health of people in low- and middle-income countries while also contributing to broader U.S. global development goals, foreign policy priorities, and national security concerns, including helping safeguard the health of Americans. These efforts began decades ago and saw major expansion in the early part of the current century with the creation of the President’s Emergency Plan for AIDS Relief (PEPFAR) and other programs. Since the beginning of the second Trump administration, however, the U.S. global health response has undergone significant change, disruption, and retraction, and the global health landscape has been altered in fundamental ways. This has included, as part of a major review of U.S. foreign aid, the dissolution of the U.S. Agency for International Development (USAID), the main implementing agency for U.S. global health programs, the elimination of numerous programs and projects, and the transition of remaining programs to the State Department.  As part of its review, the administration is seeking to assess whether U.S. foreign aid programs are aligned with U.S. national interests.

Historically, the U.S. role in global health is multifaceted and includes a broad range of activities. Its primary roles are as a supporter of bilateral (i.e., country-to-country) efforts, directly funding implementation of global health efforts in partner countries, and as a donor to multilateral health institutions (i.e., international organizations that pool support from multiple countries for one or more areas of global health). The U.S. also engages in global health diplomacy through its relationships with other governments, multilateral institutions, non-governmental organizations, and the private sector. Specifically, the U.S. government:

• acts as a donor by providing financial and other health-related development assistance (e.g., commodities, like contraceptives or bed nets for protection from disease-carrying mosquitoes) to low- and middle-income countries;
• operates programs and delivers health services;
• provides technical assistance and other capacity-building support;
• participates in major international health organizations and coordinates health efforts with other stakeholders through global health diplomacy;
• conducts research;
• supports international responses to disasters and other emergencies; and
• partners with governments, non-governmental groups, and the private sector (Figure 1).

U.S. global health activities have targeted a variety of issues and used different intervention approaches such as:

• Health services and systems strengthening: improving basic and essential health services, systems, and infrastructure;
• Disease detection and response: supporting surveillance, prevention, and treatment of diseases, including both infectious (e.g., HIV, TB, malaria) and non-communicable diseases (e.g., cardiovascular disease, cancer);
• Population and maternal/child health: promoting maternal health; reproductive health and family planning; child nutrition, immunization, and other child survival interventions;
• Nutrition, water, and environmental health: providing non-emergency food aid and supporting dietary supplementation and food security; clean/safe water and sanitation; mitigation of environmental hazards; and
• Research and development: investigating and developing new technologies, interventions, and strategies, including vaccines, medicines, and diagnostics.

While the U.S. government’s involvement in global health currently faces an uncertain future – with a more limited scope, the dissolution of USAID, and cancelation of numerous U.S.-supported global health projects, as the Trump administration seeks to reorganize foreign aid more broadly –  the U.S. has historically supported global health through a wide array of bilateral and multilateral global health programs in countries around the world including:

HIV/PEPFAR

While the U.S. first provided funding to address the emerging global HIV epidemic in 1986, U.S. funding and attention for these efforts has grown significantly in the last two decades, particularly following President George W. Bush’s 2003 announcement of the President’s Emergency Plan for AIDS Relief (PEPFAR), the coordinated U.S. government response to global HIV. Now the largest commitment by any nation devoted to a single disease, the launch of PEPFAR led to substantially increased U.S. support for HIV prevention, treatment, and care efforts, as well as U.S. contributions to multilateral entities, including the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund), the Joint United Nations Programme on HIV/AIDS (UNAIDS), and the International AIDS Vaccine Initiative (IAVI).  PEPFAR, which is housed in the Department of State, has been credited with saving 26 million lives and contributing to broader health, educational, and economic gains.  Currently, PEPFAR faces significant change. While U.S. policymakers had been increasingly looking at when and how to transition PEPFAR services and financing to country governments, the current Trump administration has sought to narrow PEPFAR’s scope and significantly accelerate this timeline. See the “Status of PEPFAR” fact sheet for more information.

Tuberculosis (TB)

Since the 1998 launch of USAID’s global TB control program, the U.S. response to global TB has expanded, particularly after 2003 when PEPFAR highlighted the U.S. government’s commitment to addressing TB. Prior to the current Trump administration, these efforts focused on diagnosis, treatment, and control of TB (including multi-drug-resistant and extensively drug-resistant TB, or MDR/XDR TB) as well as on research. The U.S. was also a donor to the Global Drug Facility of the Stop TB Partnership.  With the dissolution of USAID, remaining TB programming has been moved to the State Department and its scope has been reduced. See the “Status of U.S. Global Tuberculosis Efforts” fact sheet for more information.

Malaria/PMI

Engaged in malaria work since the 1950s, the U.S. supported expanded malaria efforts in low- and middle-income countries through the President’s Malaria Initiative (PMI), launched in 2005 and housed at and managed by USAID, as well as through research and other activities. PMI programs centered on expanding coverage of six key high-impact interventions to control or eliminate malaria, which included: diagnosis of malaria and treatment with artemisinin-based combination therapies (ACTs), entomological monitoring, intermittent preventive treatment in pregnancy (IPTp), indoor residual spraying (IRS) with insecticides, insecticide-treated mosquito nets (ITNs), and seasonal malaria chemoprevention (SMC). The U.S. has also supported the RBM Partnership to End Malaria.  Under the current administration, remaining PMI programming has been moved into the State Department. See the “Status of the President’s Malaria Initiative (PMI)” fact sheet for more information.

Maternal and Child Health (MCH)

Involved in efforts to improve MCH since the 1960s,  U.S. global MCH activities, which had been housed at and managed by USAID, aimed to bring to scale a range of high-impact interventions that mitigate maternal, newborn, and under-five deaths; prevent and address the indirect causes of such deaths (such as HIV, TB, and malaria); strengthen integration of maternal health services with family planning; improve equity of access to and use of services by vulnerable populations; and strengthen health systems. The U.S. has also been a donor to global organizations and initiatives addressing MCH, such as Gavi, the Vaccine Alliance, the United Nations Children’s Fund (UNICEF), and the Global Polio Eradication Initiative (GPEI).Under the current administration, remaining MCH programming has been moved into the State Department. See the “Status of U.S. Global Maternal and Child Health Efforts” fact sheet for more information.

Nutrition

For more than 40 years, the U.S. had been involved in nutrition efforts in low- and middle-income countries that aimed to prevent undernutrition through support for effective interventions, such as nutrition education, nutrition during pregnancy, exclusive breastfeeding, and micronutrient supplementation. Housed at and managed by USAID, U.S. global nutrition efforts were coordinated with the U.S. Feed the Future Initiative (FtF, launched in 2009), which aimed to address global hunger and food security. Currently, remaining nutrition programming has been moved to the State Department. See the “Status of U.S. Global Maternal and Child Health Efforts” fact sheet for more information.

Family Planning and Reproductive Health (FP/RH)

Engaged since the 1960s in international research on family planning and population issues as well as other FP/RH efforts (including the purchase and distribution of contraceptives in developing countries),  U.S. global FP/RH activities were designed to decrease the risk of unintended pregnancies and maternal and child mortality through effective interventions, including contraception, counseling, and post-abortion care. The U.S. also provided funding to global organizations addressing FP/RH, such as the United Nations Population Fund (UNFPA), though in some years, funding for UNFPA was withheld. The current administration has moved to end U.S. bilateral and multilateral support for family planning efforts. See the “Status of U.S. Family Planning and Reproductive Health Efforts” fact sheet for more information

Neglected Tropical Diseases (NTDs)

Having historically worked on addressing NTDs through research and surveillance, attention to and funding for U.S. global NTD efforts increased markedly in 2006 with the launch of the USAID NTD Program and the subsequent announcement of expanded efforts across the U.S. government in 2008. These efforts had focused on five NTDs (soil-transmitted helminths,  lymphatic filariasis or elephantiasis, onchocerciasis or river blindness, schistosomiasis or snail fever, and trachoma) that are responsible for the overwhelming majority of the NTD burden but can be controlled and even eliminated with low-cost and effective interventions, such as an integrated control approach targeting multiple NTDs simultaneously through mass drug administration (MDA). The future of NTD efforts is uncertain amid the current Trump administration’s foreign aid freeze and dissolution of USAID.

Global Health Security (GHS)

While the U.S. has supported global health security work for more than two decades, its involvement has expanded over time, with attention to these efforts growing significantly due to the COVID-19 pandemic. These efforts aimed to reduce the threat of emerging and re-emerging diseases by supporting preparedness, detection, and response capabilities worldwide. The U.S. had also played a key role in the development and 2014 launch of the “Global Health Security Agenda (GHSA).” Through this international partnership that now involves more than 70 countries and international organizations, the U.S. worked to help countries make measurable improvements in their GHS capabilities. The U.S. had also been a donor to the new Pandemic Fund, which seeks to provide sustained financing to help countries build their capacity to prevent, prepare for, and respond to epidemics and pandemics.  While the first U.S. global health security strategy had been developed by the first Trump administration, the current Trump administration has withdrawn this strategy, eliminated several global health security positions and some offices, and withdrawn from U.S. engagement in key international efforts. See the “Status of Global Health Security/Pandemic Preparedness” fact sheet for more information.

In FY 2025, U.S. funding appropriated by Congress for global health totaled $12.4 billion. While this funding has been appropriated to federal agencies, the current administration has withheld much of it from programming and sought to formally rescind (cancel) more than $1 billion in funding for global health, including some PEPFAR funding (Congress voted to amend the rescission package, reducing that amount to $500 million, and exempting PEPFAR and some other global health programs from cuts).  As such, funding amounts presented here for the current fiscal year may not reflect actual obligations or outlays of U.S. support. There is ongoing litigation federal court regarding these actions.

As Figure 2shows, U.S. appropriations for global health have grown significantly since the early 2000s, in large part due to funding for initiatives such as PEPFAR and PMI, but with spikes in some years due to emergency or supplemental funding for disease outbreaks such as Ebola, Zika, and COVID-19. Funding reached its highest level to date in FY 2021, largely due to the U.S. global response to the COVID-19 pandemic.

Although a large majority of the American public overestimates the share of the federal budget that is spent on foreign aid (with nearly half believing that the share is greater than 20%), U.S. foreign aid actually accounts for 1% or less of the federal budget, with U.S. funding for global health—which is part of the foreign affairs budget—accounting for an even smaller share.

U.S. Global Health Funding by Program Area

Looking across funding for the major global health program areas since FY 2006, most U.S. global health funding over time has been directed to HIV programs, accounting for approximately 50% of U.S. global health funding in most years (Figure 3). The Global Fund accounted for the next largest share over the period, followed by MCH and malaria. More recently, the U.S. has emphasized global health security more, with funding for these efforts increasing considerably during the COVID-19 pandemic and afterward. Consistent with this trend, most funding was provided to HIV efforts ($5.4 billion or 44%), followed by the Global Fund ($1.7 billion or 13%) and maternal and child health and global health security (both $1.3 billion or 10%) in FY 2025 (Figure 4).

Bilateral vs. Multilateral Aid

Most U.S. global health funding is provided bilaterally – that is, funding provided by the U.S. directly to or on behalf of a recipient country or region. In FY 2025, about 80% of the U.S. global health budget was provided through bilateral programs. The remainder (about 20%) is provided multilaterally through U.S. contributions to international institutions and organizations (see “What Multilateral Health Organizations Are Supported by the U.S.?”).

Historically, the U.S. government’s engagement in global health has been carried out and overseen by multiple executive branch departments and agencies and the legislative branch, including several congressional committees (Figure 5). The current administration has made significant changes to this infrastructure. See the “Proposed Reorganization of U.S. Global Health Programs” fact sheet for more information.

Executive Branch

In general, U.S. global health engagement has developed within two main structures of the Executive Branch of government: the foreign assistance structure, which is predominantly global development-oriented and has close links to foreign policy; and the public health structure, which has its roots in disease prevention, control, and surveillance efforts.

Most funding for and oversight of U.S. global health resides within the foreign assistance structure, including:

• Department of State (State): Established in 1789, the Department of State is the Cabinet-level foreign affairs agency of the United States. It advances U.S. objectives and interests worldwide through its primary role in developing and implementing the President’s foreign policy. Prior to the current Trump administration, it also provided policy direction to USAID, the lead federal agency for development assistance. The Trump administration has dissolved USAID and moved remaining global health activities into the Department of State. The Department of State’s Bureau for Global Health Security and Diplomacy (GHSD) coordinates the Department’s work on global health security, including HIV, and houses PEPFAR.
• U.S. Agency for International Development (USAID): Established in 1961, USAID was an independent U.S. federal government agency that received overall foreign policy guidance from the Secretary of State. Its role was to support long-term and broad-based economic growth in countries and advance U.S. foreign policy objectives by supporting activities through each of its programmatic functional bureaus (e.g., Bureau for Global Health) and regional bureaus. Most USAID global health programs had been coordinated through the Bureau for Global Health, including HIV and other infectious diseases, MCH, nutrition, FP/RH, NTDs, and global health security. USAID has now been dissolved by the current administration.  
• Millennium Challenge Corporation (MCC): Established in 2004, MCC administers the Millennium Challenge Account (MCA), a U.S. government initiative providing development assistance to eligible countries to promote economic growth and reduce poverty in low- and middle-income countries. Although MCC supports several health-related programs, health is not the main focus or purpose of its work; its design is intended to link MCC contributions for development assistance (to reduce poverty through support for economic growth) to greater responsibility by low- and middle-income countries for successfully attaining certain governance and development benchmarks. The current Trump administration had sought to close down the agency but ultimately did not do so.

Agencies within the public health structure operate global health programs directly or in conjunction with foreign assistance agencies. They are represented most prominently by several agencies within the Department of Health and Human Services (HHS), including:

• Office of Global Affairs (OGA): OGA’s primary function is global health diplomacy – particularly coordinating and maintaining engagement across HHS and the U.S. government with foreign governments and ministries of health, multilateral organizations, civil society groups, and the private sector – exchanging best practices and sharing technical knowledge to advance U.S. global health priorities and research.
• Centers for Disease Control and Prevention (CDC): With a long history of working on international health issues, prior to the current Trump administration, CDC focused on disease control and prevention and health promotion through operations, development assistance, basic and field research, technical assistance, training/exchanges, and capacity building. The current administration has eliminated many of the staff working on these issues and sought to eliminate the CDC’s global health center.
• National Institutes of Health (NIH): One of the world’s leading research entities on global health, NIH conducts biomedical and behavioral science research on diseases and disorders to enhance diagnosis, prevention, and treatment and provides technical assistance and training. Prior to the current Trump administration, all 27 of the agency’s institutes and centers engaged in global health activities, but these activities are already being curtailed or eliminated.
• Food & Drug Administration (FDA): The FDA screens pharmaceutical and biological products for safety and efficacy and helps oversee the safety of the U.S. food supply.
• Health Resources and Services Administration (HRSA): HRSA builds human and organizational capacity and promotes health systems strengthening to deliver care in PEPFAR countries.

In addition to the foreign assistance and public health service agencies, other departments and agencies involved in global health have included the Department of Defense (DoD), the Department of Agriculture (USDA), the Peace Corps, the Environmental Protection Agency (EPA), the Department of Homeland Security (DHS), the Department of Labor (DoL), the Department of Commerce (Commerce), the Office of the U.S. Trade Representative (USTR), and the National Security Council (NSC). The NSC, which sits within the White House, plays a significant role across the U.S. government, as it is responsible for coordinating and reviewing the U.S. strategy and activities related to global health security, including its international response. However, the administration has eliminated many of the staff working on these issues, and is no longer operating the White House Office of Pandemic Preparedness and Response (OPPR), which had been responsible for domestic policy coordination related to health security.

Legislative Branch

The U.S. Congress introduces, considers, and passes global health-related legislation; oversees global health efforts, specifying how funds for these programs are to be (and not to be) spent; authorizes and appropriates funding; and confirms presidential appointees to key U.S. global health positions. Major committees of the House of Representatives (House) and Senate with jurisdiction over global health efforts include: the House Committee on Foreign Affairs, Senate Committee on Foreign Relations, House Committee on Energy and Commerce, Senate Committee on Health, Education, Labor, and Pensions, and the Senate and House Appropriations Committees.

The U.S. global health response has been defined by numerous governing statutes, authorities, and policy decisions. For instance, the legislation that created PEPFAR in 2003 and its subsequent reauthorizations in 2008, 2013, 2018, and 2024 are key statutes of U.S. global health policy, as they govern its bilateral HIV response, bilateral assistance for TB and malaria, and participation in the Global Fund. Other statutory requirements that shape the implementation and scope of U.S. global health activities are those governing U.S. global FP/RH efforts, such as those directing how U.S. funds may not be spent. For instance, the Helms Amendment (1973) prohibits the use of foreign assistance to pay for the performance of abortion as a method of family planning or to motivate or coerce any person to practice abortion. The Kemp-Kasten Amendment (1985) prohibits funding any organization or program, as determined by the President, that supports or participates in the management of a program of coercive abortion or involuntary sterilization (it has been invoked at times to restrict funding to UNFPA).

While Congress has authority over many aspects of global health, the current administration has taken several actions without its direct consent (such as eliminating USAID and withholding Congressionally-directed appropriations), and has questioned the extent of Congressional authority in these areas. It is unclear if Congress will act on these issues and some of these questions are being litigated in federal court.

Prior to the current Trump administration, the U.S. provided bilateral support for U.S. global health programs in almost 80 countries, with additional countries reached through U.S. regional global health programs and U.S. contributions to multilateral organizations. Multiple factors determined where the U.S. channeled its global health support. While more U.S. support was generally directed to countries facing a higher burden of disease, it was also influenced by factors such as the presence of willing and able partner governments, a history of positive relations and goodwill with host countries, strategic and national security priorities, and funding and personnel availability. The majority of countries receiving U.S. bilateral support for global health (“partner countries”) were located in sub-Saharan Africa (35 countries), followed by the Western Hemisphere (14 countries), East Asia and Oceania (11 countries), South and Central Asia (9 countries), Europe and Eurasia (4 countries), and Middle East and North Africa (4 countries) (Figure 5). Most U.S. bilateral support for global health programs was provided in sub-Saharan Africa (84%) (Figure 6). Furthermore, the top 10 country recipients of U.S. global health funding, representing 59% of U.S. bilateral support for global health, were all in this region (Figure 7).

The U.S. typically operated more than one health program (HIV, TB, malaria, etc.) in each partner country. While in most countries, the U.S. operated programs in four or fewer global health areas, this number was generally higher in countries in sub-Saharan Africa (five or more).

In addition to its bilateral programs, the U.S. has a long history of engagement with multilateral health organizations and international institutions, beginning with its role in the development of the first such organizations, including the Pan-American Health Organization (PAHO) in the early 1900s and the World Health Organization (WHO) a few decades later. This involvement continued with, for example, the Global Fund (which the U.S. helped to launch in 2001), Gavi (launched in 2000), the GHSA (which the U.S. played a key role in developing and launching in 2014), and the Pandemic Fund (launched in 2022). Prior to the current Trump administration – which is carrying out a review of its engagement in international organization to determine the future of U.S. multilateral participation and support – U.S. support for multilateral global health efforts has taken various forms, including:

• Funding. The U.S. has often been the largest or one of the largest donors to multilateral health efforts, funding core (generally used to support essential functions and operations) and voluntary (used for specific projects or initiatives the U.S. seeks to support) contributions. About a fifth (19%) of U.S. global health funding supported U.S. contributions to multilateral health organizations (Figure 8). However, some global health support to multilateral organizations has already been reduced or eliminated by the current Trump administration, such as funding and engagement in the World Health Organization, UNFPA, and the Pandemic Fund.
• Governance. The U.S. has been active in the governance structures that oversee multilateral global health organizations and initiatives, including holding permanent or rotating seats on many of their boards.
• Technical assistance. The U.S. has offered technical assistance in support of grants to partner countries, providing additional staff capacity to international organizations (by detailing U.S. government employees to these organizations for periods of time).
• Standard setting. The U.S. has engaged in standard-setting, weighing in on global plans, treaties, and agreements to respond to a range of health issues as they are developed and considered for approval by the larger body.

The U.S. has engaged with a number of multilateral global health organizations, including health-focused specialty agencies of the United Nations (U.N.) and international financing mechanisms for global health. Key among these are eight to which Congress specifically directs funding (though the U.S. also reaches other multilateral health institutions without direct Congressional appropriations but rather through general support), of which the U.S. has been the top contributor to five (the Global Fund, PAHO, UNAIDS, UNICEF, and WHO):

U.N. Agencies

• World Health Organization (WHO): WHO, created in 1948, is the directing and coordinating authority for health within the U.N. system. WHO provides international leadership on global health matters, shaping the health research agenda, setting norms and standards, providing technical support to countries, and monitoring and assessing health trends. The U.S. has been involved in WHO since its creation, providing financial and technical support as well as participating in its governance structure. However, President Trump announced on the first day of his second term that the U.S. would withdraw as a member of WHO and halt funding to the organization.
• Pan American Health Organization (PAHO): PAHO is the oldest international health agency, founded originally as the International Sanitary Bureau in 1902. The U.S. joined PAHO as a member state in 1925. PAHO, the specialized international health agency for the Americas, “works with countries throughout the region to improve and protect people’s health” and serves as the WHO Regional Office for the Americas and as the health organization of the inter-American System.
• Joint United Nations Programme on HIV/AIDS (UNAIDS): UNAIDS, created in 1996 as the successor organization to the WHO Global Programme on AIDS (GPA), is the leading global organization for addressing HIV/AIDS. Coordinating efforts across the U.N. system, it is made up of 11 U.N. co-sponsors and guided by a Programme Coordinating Board (PCB), which is a subset of its co-sponsors and government representatives. The U.S. currently serves on the PCB.
• United Nations Children’s Fund (UNICEF): UNICEF, created in 1946, aims to improve the lives of children, particularly the most disadvantaged children and adolescents, and is one of the largest purchasers of vaccines worldwide. The U.S. was a founding member that same year.
• United Nations Population Fund (UNFPA): UNFPA, created in 1969, is the largest purchaser and distributor of contraceptives worldwide. While the U.S. helped to found UNFPA and was a leading supporter for many years, its support has fluctuated significantly and sometimes been withheld entirely over the years, due to ongoing U.S. political debates about abortion. The Trump administration has announced that it is withholding funding from UNFPA.

Non-U.N. Financing Mechanisms

• Gavi, the Vaccine Alliance (Gavi): Gavi, created in 2000, is a public-private partnership that aims to increase access to immunization in poor countries. The U.S. has been involved in Gavi since its creation through contributions, participation in Gavi’s governance, and technical assistance. The U.S. is the second largest donor to Gavi’s core programs and the top donor to Gavi’s COVAX Advance Market Commitment (COVAX AMC), a financial mechanism within COVAX that supports low- and middle-income countries through procurement and distribution of COVID-19 vaccines.
• Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund): The Global Fund, created in 2001, is an independent multilateral financing entity that supports HIV, TB, and malaria programs in low- and middle-income countries. The U.S. was involved in creating the Global Fund and maintains a permanent seat on its Board. U.S. contributions and those of other donors are pooled and then provided by the Global Fund to country-driven projects based on technical merit and need.
• TB Global Drug Facility: The Global Drug Facility, created in 2001, is a financing mechanism of the Stop TB Partnership; it provides grants to countries for TB drugs.

U.S. support for multilateral institutions overall has fluctuated over time, reflecting, in part, changing U.S. leadership views on the relative value of bilateralism versus multilateralism. As a result, U.S. engagement in and contributions to specific multilateral health organizations and institutions may change over time. For example, the U.S. under the first Trump administration did not participate in the partnership to create  COVAX (an international partnership led by the Coalition for Epidemic Preparedness Innovations [CEPI], Gavi, and WHO) to facilitate greater global access to the COVID-19 vaccine, although Congress did provide $4 billion in emergency funding to Gavi in support of COVID-19 vaccine access. Under the Biden administration, the U.S. joined the COVAX partnership.

Multilateral initiatives complement U.S. bilateral global health efforts, helping make progress toward U.S. goals in various program areas. In some cases, U.S. multilateral global health support allows the U.S. to reach a larger number of countries; it also may help to leverage additional funding and provide opportunities for improved coordination and technical consultations. Additionally, U.S. policies related to funding can greatly influence other financial support for multilaterals. For instance, since U.S. law has required that the U.S. contribution to the Global Fund cannot exceed 33% of total contributions from all donors, the U.S. contribution has leveraged other donor contributions; in effect, this requirement encouraged increased support from other donors and prevented the U.S. from becoming the predominant donor to the Global Fund.

The U.S. has been the largest donor to global health, providing over 40% of all international health assistance among major donor governments (Figure 9).

In addition, the U.S. has historically devoted more of its foreign assistance to health than any other donor government, contributing over a quarter of its foreign assistance to global health in 2023 (Figure 10). The U.S. has also been the largest government donor to several specific global health areas, including HIV and family planning. Currently, however, the Trump administration is withholding global health funds in several areas and actual spending levels are still unknown.

While the U.S. has been engaged in international health activities for over a century and has historically been the largest funder and implementer of global health programs worldwide, it is currently undergoing a fundamental shift, with a significantly reduced footprint and role.  Given the prominence of the U.S. in global health, these actions have and will influence the larger global health ecosystem and the health of those in low and middle income countries. Among the key issues to watch are:

• The future direction of U.S. leadership in and degree of commitment to global health as the Trump administration reorganizes foreign assistance more broadly and seeks to permanently alter the U.S. role.
• The status of U.S. funding for global health, particularly given the interplay between Congress and the administration on whether and how that funding gets spent and ongoing litigation in this area.
• The ability of global health implementers to continue to deliver services to those who need them, given their loss of funding and future uncertainty.
• The future role of multilateral institutions in global health, as the U.S. bilateral role is reduced, but also its support for multilateral health efforts remains unclear.
• Whether other donors (governments, foundations, the private sector) will help to fill some of the gaps left by the U.S.
• Whether the nations that have been recipients of U.S. global health support will increase their own financing and delivery of health services to their populations.

• Overview of President Trump’s Executive Actions on Global Health
• KFF Resources on the Trump Administration’s Foreign Aid Review and Global Health Aid Cuts
• KFF Global Health Fact Sheets including The U.S. Government and Global Health and Breaking Down the U.S. Global Health Budget by Program Area
• U.S. Global Health Budget Tracker
• KFF Global Health Budget Summaries
• The Outlook for PEPFAR in 2025 and Beyond
• PEPFAR Policy Resource Hub
• KFF Dashboard: Progress Toward Global HIV Targets in PEPFAR Countries
• KFF Dashboard: Progress Toward Global Malaria Targets in PMI Countries
• The U.S. Congress and Global Health: A Primer
• U.S. Global Health Legislation Tracker
• Key Global Health Positions and Officials in the U.S. Government

Oum, S., Moss, K., & Kates, J., The U.S. Government and Global Health. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-the-u-s-government-and-global-health/ (date accessed).

Polls and surveys are useful tools for understanding health policy issues. However, it takes time and training to understand how to interpret survey results and to decide which polls are useful and which might be misleading. The aim of this chapter is to help you learn how to be a good consumer of polls so they can be a valuable part of your toolkit for understanding the health policy environment. It begins by discussing why polls are an important tool in policy analysis and the caveats to keep in mind when interpreting them. It then discusses polling methodology and the questions you should ask to assess the quality and usefulness of a poll. The chapter ends with some real-world examples in which polling helped inform policy debates.

People sometimes ask if there is a difference between a “poll” and a “survey.” The quick answer is that every poll is a survey, but not every survey is a poll (for example, large federal surveys like the Census or surveys of hospitals or other institutions would not be called polls). For purposes of this chapter, we use the terms interchangeably.

Polls have gotten a bad rap over the past few years, particularly around election times when they don’t do a perfect job predicting who the winner of a given election will be. Given this, you may wonder why you should pay attention to polls when trying to understand health policy. There are six basic reasons why it’s important for health policy scholars to understand public opinion:

1. People vote, and elections can have important consequences for health policy at the local, state, and national levels. While polls may not always be perfect predictors of election outcomes, they are one of the best ways to understand the dynamics of how voters are thinking and feeling when weighing their vote choices, not only for high-profile offices like President and Congress, but for state and local races and ballot initiatives as well.

2. Public opinion can influence policy choices, particularly for highly salient issues, like health care, that touch pretty much everyone’s lives in some way. While the average member of the public may not be equipped to understand the details of most health policy legislation, their preferences and views can put constraints on lawmakers by identifying actions that would be deemed unacceptable by large majorities of the public or their constituents.

3. Polls can also provide information about the broader environment in which health policy issues or changes are being debated. They can help you understand the salience of a given issue (i.e., how much do people care about prescription drug prices and how closely are they paying attention to debates over how to lower them?) and identify other factors that might affect the likely success of a given policy (i.e., if the country’s attention is focused on a foreign policy crisis, how will that affect the public’s reaction to a major new proposal to overhaul Medicaid?).

4. Beyond measuring opinion, surveys can also be useful for understanding how health policy is affecting people. Survey questions about people’s experiences can offer context by providing information like the share of people who are struggling to afford their health insurance. Looking at questions like these at multiple points in time can also help you understand how experiences change in the months and years following enactment of major health legislation.

5. Surveys can help amplify the voices of real people in policy debates, particularly those that are often ignored or drowned out by special interests. Polling that includes adequate sample sizes to represent the voices of marginalized and underrepresented populations, such as members of racial and ethnic minority groups, immigrants, LGBTQ individuals, people living in rural areas, and those with lower incomes, may be especially useful for understanding the impact of health policy on people.

6. In this way, methodologically sound, non-partisan, transparent surveys can serve as a counterweight to polls sponsored by special interests that are conducted in private and used to craft public messages, design campaigns, or sell products.

Polls do not tell the whole story. Public opinion is just one part of the political and policymaking process. Public support for a given policy may seem clear based on a single survey question, but it can be quite malleable in the course of a public debate, and not all surveys measure this malleability. Small changes in survey question wording can sometimes lead to big changes in public support, so it’s important never to rely on a single question from a single poll to make a conclusion about what the public thinks or knows. When possible, look for multiple questions on the same topics from multiple polls conducted at various times. If the answers are consistent, you can be more confident that the conclusion is correct. Sometimes a poll finding conflicts with your best sense of political reality when all available information is considered. In those instances, there’s a good chance your “gut” is a better guide than what a given poll tells you.

There are limits to polling on complex topics like health care. When the public says they support a specific proposal for lowering health care costs, it doesn’t mean they have fully thought through the details of that proposal and its implications. Rather, it may signal how important they think it is for policymakers to address the high cost of health care. And while some polls test this by asking follow-up questions that probe the public about trade-offs to any given policy approach, some health policy topics are just too complicated to reasonably ask the average American to weigh in on in a short survey.

Public opinion can’t give you the “right” answer. While public opinion can tell you where the public stands on an issue, it cannot tell you what the right policy solution is in any given situation. For example, pollsters often ask people to rank the priority they give to different health issues before Congress. They may ask the public to rank the issues of prescription drug costs, the future of the Affordable Care Act, Medicaid expansion, the financial sustainability of Medicare, and so forth. But it turns out that real people aren’t organized like congressional committees and don’t put the issues neatly into policy buckets like pollsters do. What they are concerned about is the cost and affordability of health care, a concern that cuts across these issues. These ranking questions provide some information about what resonates most with the public, but that doesn’t mean they should be treated as a rank-ordered list for policymakers to address starting from the top down. In addition, beyond telling you what the public thinks, polls can be just as useful for pointing out what the public doesn’t understand about a given policy issue, allowing you to direct outreach and education efforts or figure out messaging that will resonate with the public if you are advocating for a policy change.

The science of survey research is complicated, but there are a few simple terms you can learn and questions you can ask when you encounter polls in your schooling and daily life. These include:

Population. Who is the population that the survey is claiming to represent? Polls can be conducted with many different populations, so it is important to know how researchers define the population under study. For example, a survey of voters may be useful for your understanding of a particular health care issue’s importance in the election, but it might not be as useful for estimating how many people have had problems paying medical bills, since lower-income people (who may be the most likely to experience bill problems) are less likely to be voters and may be left out of the study entirely.

Sampling. How did researchers reach the participants for their poll, and was it a probability or non-probability sample? In a probability-based sample, all individuals in the population under study have a known chance of being included in the survey. Such samples allow researchers to provide population estimates (within a margin of sampling error) based on a small sample of responses from that population. Examples of probability-based sampling techniques include random digit dialing (RDD), address-based sampling (ABS), registration-based sampling (RBS), and probability-based online panels. Non-probability sampling, sometimes called convenience or opt-in sampling, has become increasingly common in recent years. While non-probability surveys have some advantages for some types of studies (particularly their much lower cost), research has shown that results obtained from non-probability samples generally have greater error than those obtained from probability-based methods, particularly for certain populations.

Data collection (survey mode). While there are many ways to design a survey sample, there are also many ways to collect the data, known as the survey mode. For many years, telephone surveys were considered the gold standard because they combined a probability-based sampling design with a live interviewer. Survey methodology is more complicated now, but it is still important to know whether the data was collected via telephone, online, on paper, or some other way. If phones were used, were responses collected by human interviewers or by an automatic system, sometimes known as interactive voice response (IVR) or a “robocall”? Or were responses collected via text message? Depending on the population represented, different approaches might make the most sense. For example, about 5% of adults in the U.S. are not online, and many others are less comfortable responding to survey questions on a computer or internet-connected device. While young adults may be comfortable responding to a survey via text message, many older adults still prefer to take surveys over the phone with a live interviewer. Some populations feel a greater sense of privacy when taking surveys on paper, while literacy challenges may make a phone survey more appropriate for other populations. Many researchers now combine multiple data collection modes in a single survey to make sure these different segments of the population can be represented.

Language. Was the survey conducted only in English, or were other languages offered? If the survey is attempting to represent a population with lower levels of English language proficiency, this may affect your confidence in the results.

Survey sponsor. Who conducted the survey and who paid for it? Understanding whether there is a political agenda, special interest, or business behind the poll could help you better determine the poll’s purpose as well as its credibility.

Timing. When was the survey conducted? If key events related to the survey topic occurred while the survey was in the field (e.g., an election or a major Supreme Court decision), that might have implications for your interpretation of the results.

Data quality checks. During and after data collection, what data quality checks were implemented to ensure the quality of the results? Most online surveys include special “attention check” questions designed to identify respondents who may have fabricated responses or rushed through the survey without paying attention to the questions being asked. Inclusion of these questions is a good sign that the researchers were following best practices for data collection.

Weighting. Were the results weighted to known population parameters such as age, race and ethnicity, education, and gender? Despite best efforts to draw a representative sample, all surveys are subject to what is known as “non-response bias” which results from the fact that some types of people are more likely to respond to surveys than others. Even the best sampling approaches usually fall short of reaching a representative sample, so researchers apply weighting adjustments to correct for these types of biases in the sample. When reading a survey methodology statement, it should be clear whether the data was weighted, and what source was used for the weighting targets (usually a survey from the Census or another high-quality, representative survey).

Sample size and margin of sampling error. The sample size of a survey (sometimes referred to as the N) is the number of respondents who were interviewed, and the margin of sampling error (MOSE) is a measure of uncertainty around the survey’s results, usually expressed in terms of percentage points. For example, if the survey finds 25% of respondents give a certain answer and the MOSE is plus or minus 3 percentage points, this means that if the survey was repeated 100 times with different samples, the result could be expected to be between 22%-28% in 95 of those samples. In general, a sample size of 1,000 respondents yields a MOSE of about 3 percentage points, while smaller sample sizes result in larger MOSEs and vice versa. Weighting can also affect the MOSE. When reading poll results, it is helpful to look at the N and MOSE not only for the total population surveyed, but for any key subgroups reported. This can help you better understand the level of uncertainty around a given survey estimate. The non-random nature of non-probability surveys makes it inappropriate to calculate a MOSE for these types of polls. Some researchers publish confidence estimates, sometimes called “credibility intervals,” to mimic MOSE as a measure of uncertainty, but they are not the same as a margin of sampling error. It’s also important to note that sampling error is only one source of error in any poll.

Questionnaire. Responses to survey questions can differ greatly based on how the question was phrased and what answer choices were offered, so paying attention to these details is important when evaluating a survey result. Read the question wording and ask yourself – do the answer options seem balanced? Does the question seem to be leading respondents toward a particular answer choice? If the question is on a topic that is less familiar to people, did the question explicitly offer respondents the chance to say they don’t know or are unsure how to answer? If the full questionnaire is available, it can be helpful to look at the questions that came before the question of interest, as information provided in these questions might “prime” respondents to answer in a certain way.

Transparency. There is no “gold seal” of approval for high-quality survey methods. However, in recent years, there has been an increasing focus on how transparent survey organizations are about their methods. The most transparent researchers will release a detailed methodology statement with each poll that answers the questions above, as well as the full questionnaire showing each question in the survey in the order they were asked. If you see a poll released with a one or two-sentence methodology statement and can’t find any additional information, that may indicate that the survey organization is not being transparent with its methods. The American Association for Public Opinion Research has a Transparency Initiative whose members agree to release a standard set of information about all of their surveys. Some news organizations also “vet” polls for transparency before reporting results, but many do not. This means that just because a poll or survey is reported in the news doesn’t necessarily mean it’s reliable. It’s always a good idea to hunt down the original survey report and see if you can find answers to at least some of the questions above before making judgments about the credibility of a poll.

Election polling vs. issue polling. Election polls – those designed at least in part to help predict the outcome of an election – are covered frequently in the media, and election outcomes are often used by journalists and pundits to comment on the accuracy of polling. Issue polls – those designed to understand the public’s views, experiences, and knowledge on different issues – differ from election polls in several important ways. Perhaps the most important difference is that, in addition to the methodological challenges noted above, election polls face the added challenge of predicting who will turn out to vote on election day. Most election polls include questions designed to help with this prediction, and several questions may be combined to create a “likely voter” model, but events or other factors may affect individual voter turnout in ways pollsters can’t anticipate. Election polls conducted months, weeks, or even days before the election also face the risk that voters will change their mind about how to vote between the time they answer the survey and when they fill out their actual ballot. Issue polls do not generally face these challenges, so it’s important to keep in mind that criticisms about the accuracy of election polls may not always apply to other types of polls.

Example #1: Tracking the evolution of public opinion and experience through debate, passage, and implementation of the Affordable Care Act

The Affordable Care Act (ACA) is the largest health legislation enacted in the 21^st century. From the time the legislation was being debated in Congress through its passage, implementation, and efforts to repeal it, the ACA has been the subject of media coverage, political debate, campaign rhetoric, and advertising. In each of those stages, polls and surveys have provided important information for understanding what was happening with the law.

Prior to passage, polls showed the public’s desire for change in health care, particularly when it came to decreasing the uninsured rate and making health care and insurance more affordable. Despite this apparent consensus on the need for change, polls also helped shed light on some of the barriers to passing legislation. For example, survey trends demonstrated how the share of the public who expected health reform legislation to leave their families worse off increased over the course of an increasingly public debate in which opponents tapped into fears about how the proposed law might change the status quo.

After the law was passed, public opinion on the ACA was sharply divided along partisan lines, with majorities of Democrats viewing the law favorably and majorities of Republicans having an unfavorable view. However, surveys also painted a more nuanced picture beyond the overall partisanship, showing that majorities of U.S. adults across partisan lines favored many of the things the ACA did, including allowing young adults to stay on their parents’ insurance until age 26, preventing health plans from charging sick people more than healthy people, and providing financial subsidies to help lower- and moderate-income adults purchase coverage. At the same time, polls showed that many adults were not aware that these provisions were part of the ACA, and that many others incorrectly believed the law did things it did not, such as creating a government-run insurance plan and allowing undocumented immigrants to receive government financial help to purchase coverage.

This combination of “the parts more popular than the whole” and incomplete public knowledge of the law provided some insight into why efforts to repeal the law were ultimately unsuccessful despite the relative unpopularity and deep partisan divisions on the law overall. When faced with the very real prospect of the popular parts of the law going away – particularly the protections for people with pre-existing health conditions – the public (and particularly Democrats and independents who had previously expressed lukewarm support) rallied to protect it. In fact, following concerted Republican efforts to repeal the law in 2017, the ACA has remained more popular than ever, with more adults expressing a favorable than an unfavorable opinion.

In addition to providing information about the public’s evolving opinion and awareness of the law, surveys also helped provide information about people’s experiences under the law. For example, a 2014 survey of people who purchase their own insurance found that 6 in 10 people enrolled in insurance through the new marketplaces were previously uninsured, and that most of this group said they decided to purchase insurance because of the ACA. Subsequent surveys showed that most marketplace enrollees were satisfied with their plans, but many reported challenges related to the affordability of coverage and care.

These are just a few examples of the ways surveys helped provide insights into the dynamics of a complex health policy at different points in time.

Example #2: Understand the limits of public support of Medicare-for-All proposals

Another health policy issue where polls have provided useful information is the debate over a national, single-payer health plan. While the idea has been discussed for decades, public discussion was prominent most recently during the 2016 and 2020 Democratic presidential primaries, when Senator Bernie Sanders made “Medicare-for-all” a centerpiece of his campaign. Since 2017, a majority of U.S. adults have supported the idea of a national Medicare-for-all plan, but once again, polls also indicated why such a proposal had never become a political reality. For example, the public’s reaction to the idea varies considerably based on the language used to describe it; while majorities view the terms “universal coverage” and “Medicare-for-all” positively, most have a negative reaction to “socialized medicine,” and many are unsure how they feel about the term “single-payer health insurance.” Surveys also demonstrate that while support starts out high, many people say they would oppose a Medicare-for-all plan if they heard common arguments made by opponents, such as that it would lead to delays in treatments, threaten the current Medicare program, or increase taxes. Polls like these and others that test different messages can help shed light on the public’s likely reaction to real-world debates over policies, helping us understand some of the reasons why certain policies that seem to attract majority support in the abstract face an uphill battle once public debate and discussion about them begin.

Example #3: Understanding the impact of the Supreme Court’s overturning of Roe v. Wade

Polls can also help shed light when sudden events create policy changes that immediately affect individuals’ access to health care in different scenarios. A recent example is the Supreme Court 2022 decision in Dobbs v. Jackson that overturned Roe v. Wade and eliminated the nationwide right to abortion that had been in place since 1973. The Dobbs decision opened the door for states to pass their own abortion regulations, and many states had previously established “trigger laws” that made abortion illegal as soon as Roe was overturned.

Polls before and after the 2022 midterm election indicated how the overturn of Roe affected voter motivation, turnout, and vote choice. For example, polling in October 2022 showed abortion increasing as a motivating issue for voters, particularly among Democrats and those living in states where abortion was newly illegal. And election polling of voters showed how the Supreme Court decision played a key role in motivating turnout among key voting blocs that likely contributed to the Democratic party’s stronger-than-expected performance in the midterms. Two years later, amid growing economic concerns, polls leading up to the 2024 election showed that while the economy and inflation were far and away the top issues for voters, some key groups of women voters as well as voters in states with abortion-related ballot initiatives continued to be motivated by the issue of abortion more than two years after the Dobbs decision.

Understanding the impact of Dobbs is an area where polling of specific populations (including grouping individuals by the abortion laws in their state) is more useful than looking at the U.S. population as a whole. For example, in addition to shedding light on the dynamics of abortion as an election issue, polling in 2023 indicated widespread confusion about the legality of medication abortion, particularly among people living in states that had banned or severely limited the procedure. Surveys also shed light on the experiences of people living in different states; for example, a 2024 survey found that 1 in 5 women of reproductive age (18-49) living in states with abortion bans said either they or someone they know had difficulty accessing an abortion since the Supreme Court overturned Roe v. Wade due to restrictions in their state.

Example #4: Amplifying the voices and experiences of marginalized populations

Well-designed surveys of under-represented groups can provide important information about health policy by amplifying the opinions and experiences of those whose voices are often left out of policy debates. Examples include:

• A survey of 2023 Medicaid enrollees documented the coverage status of people who were disenrolled during the Medicaid “unwinding” process. Beginning in March 2020, states kept people enrolled in Medicaid without the need to renew or re-determine eligibility under a law passed in response to the COVID-19 pandemic. When the law expired in March 2023, it was uncertain how individuals and families would be affected. Surveys like this helped document the impact of the policy change on people’s coverage status and access to care.
• A survey of U.S. immigrants shed light on the health and health care experiences of a group that makes up one-sixth of the adult population. Among other findings, this survey showed that half of all likely undocumented immigrants in the U.S. lacked health insurance coverage, information not previously available from other data sources. It also illustrated the importance of state policies in determining coverage rates for immigrant adults, documenting the much higher uninsured rate among immigrants living in states with less expansive coverage policies (like Texas) compared to those in states with more expansive policies (like California).
• A survey of trans adults documented this population’s struggles accessing appropriate health care. Among other findings, this survey found that almost 4 in 10 trans adults said it was difficult to find a health care provider who treats them with dignity and respect, 3 in 10 said they had to teach a provider about trans people in order to get appropriate care, and 1 in 5 had health insurance that would not cover gender-affirming treatment. Importantly, these survey findings help increase understanding of the health care experiences of a group that is often marginalized in U.S. society, and one that also faces other barriers, including economic challenges, higher rates of mental health challenges and unmet needs for mental health care.
• A survey focused on racism, discrimination, and health showed the extent of discrimination and unfair treatment in health care settings. This survey found that large shares of Black, Hispanic, Asian, and American Indian and Alaska Native adults reported preparing for possible insults or being very careful about their appearance in order to be treated fairly during health care encounters. It also showed how individuals who have more visits with providers who share their racial and ethnic background report more positive health care experiences. These findings provide insights into possible policy solutions to improve care, highlighting the importance of a diverse health care workforce that is trained in culturally appropriate care.
• Surveys of areas impacted by natural disasters also help provide information to guide recovery efforts in these areas. For example, a survey of Hurricane Katrina evacuees living in Houston-area shelters documented the physical and emotional toll of the storm and the disproportionate impact on lower-income, African American, and uninsured residents. A series of surveys of New Orleans residents in the years following Katrina showed steady progress in many areas of recovery, but highlighted how the gap between the experiences of the city’s Black and White residents grew over time in many ways. Surveys of Puerto Rico residents following Hurricane Maria and Texas Gulf Coast residents following Hurricane Harvey provided similar insights to shine a lens on disparities and highlight the needs of the local populations in those areas.

• KFF Polling
• American Association for Public Opinion Research (AAPOR): Student Resources, Best Practices, Election Polling Resources, and Transparency Initiative
• Roper Center for Public Opinion Research, including their iPoll database
• Pew Research Center: Short course on polling basics, Methods 101 videos, election polling explainer and Decoded blog

Brodie, M., Hamel, L., & Kirzinger, A., The Role of Public Opinion Polls in Health Policy. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-the-role-of-public-opinion-polls-in-health-policy (date accessed).

Private health coverage is subject to significant requirements at the state and federal levels. While the Affordable Care Act (ACA) of 2010 ushered in many new requirements for the federal regulation of private health coverage, another federal law, the Employee Retirement Income Security Act (ERISA), has for over 50 years regulated the most predominant form of health coverage for people under age 65, employer-sponsored coverage.

States have traditionally been the primary regulators of health insurance, and state health insurance protections continue to play a major role alongside a growing list of federal protections aimed at addressing a variety of consumer concerns, including access to coverage, affordability, and adequacy. This chapter describes the landscape of laws and regulations that address health care coverage and the complicated interactions between state and federal requirements that can make these protections challenging for consumers to navigate. In this chapter, it is not possible to cover every single state and federal requirement for private plans, so the focus is on the primary laws and regulations that apply to private insurance coverage.

Private health coverage is a mechanism for people to finance the health care services and medications they need, protecting them from the potentially extreme financial costs of this care.

At its core, health coverage is a financial contract between a private organization insuring the risk of loss and a policyholder. Where those insuring the risk or paying health claims are private entities such as insurance companies or private employers, this coverage is considered “private.” Coverage available in Health Insurance Marketplaces created by the ACA is considered private coverage, even though the Marketplaces are administered by state or federal government agencies. Public coverage, by contrast, involves financing arrangements for programs such as Medicare and Medicaid, which are paid primarily from public sources. This includes private plans participating in Medicare Advantage and Medicaid managed care arrangements. (See the chapters on Medicare and Medicaid for more information.)

A fundamental concept for the private provision of health coverage is pooling the health care “risk” of a group of people to make the costs of coverage more predictable and manageable. The goal typically is to maintain a risk pool of people whose health, on average, is the same as that of the general population. Private health coverage regulation has historically included steps to prevent insurers and plan sponsors from avoiding people in poor health, while also ensuring that risk pools include people in good health to guard against “adverse selection.”

A risk pool with adverse selection that attracts a disproportionate share of people in poor health, who are more likely to seek health coverage than people who are healthy, will result in increased costs to cover those in the pool, leaving those in better health to seek out a pool with lower costs.

Sources of private coverage. An individual with private coverage generally obtains it through one of two sources, either through their employer (“group” coverage) or by directly purchasing it from an insurer (“nongroup” coverage). Other related sources of coverage don’t exactly fit into one of these two categories, such as coverage provided by professional associations.

1. Employer coverage: In 2023, about 165 million people under age 65 had coverage through an employer. Employer-sponsored coverage is offered to eligible employees and usually to employees’ dependents, such as spouses and children. This coverage is referred to as “group” coverage, which is further broken down into small-group or large-group depending on the number of employees (Figure 1).

Private employers who “sponsor” group health plan coverage could include a range of entities, from a single nationwide retail employer with thousands of employees in many states to a small “mom and pop” operation with a handful of employees in one location. A single union can also be a group health plan sponsor of private coverage as an “employee organization,” as well as entities called “multiemployer” plans that are collectively bargained entities run by a joint board of trustees from labor and management that oversee collectively bargained benefits provided to employees of more than one employer, often in the same industry (for example, hotel workers or skilled workers in the building trades).

Public employers—federal, state, or local government—also sponsor group health coverage. The Federal Employee Health Benefit (FEHB) Program is the largest employer-sponsored health plan in the US. State and local government health plans are often referred to as non-federal governmental plans.

Employers, private and public, have at least two approaches to make coverage available to employees:

• Fully-insured. An employer can purchase coverage from an insurer to cover their employees for a set premium. In this “fully-insured” arrangement, the insurer bears the financial risk if that group of employees ends up costing more than expected; these plans are regulated by the state in which they are sold. Each state has a group market for the sale of health insurance that is divided by size of the group for oversight and regulation: large group and small group.
  • Large Group Insurance Market typically involves insurance products sold to employers with 51 or more individuals (employees).
  • Small Group Insurance Market is generally an employer group of 50 or fewer individual employees. Small employers can purchase small group coverage from an insurer or through the state’s health insurance exchange or Small Business Health Options Program (SHOP). In a handful of states, the SHOP is the only place where a small employer can purchase state-regulated small group insurance coverage.
• Self-insured. Employers can also use a “self-insured” (also often referred to as “self-funded”) arrangement where the employer assumes the financial risk by directly paying all covered claims. The employer typically contracts with a third-party administrator (TPA) to administer benefits by paying claims, designing benefits, establishing provider networks, and coordinating other aspects of coverage. TPAs are some of the same private organizations that provide health insurance as another line of business, as well as organizations called Pharmacy Benefit Managers (PBMs) that administer prescription drug benefits. As a result, coverage may not appear different to the covered worker than if they had fully-insured coverage. As explained in an upcoming section, unlike fully insured health coverage, self-insured coverage provided by private employers is largely not subject to state law but is governed primarily by federal law—mainly ERISA. Self-insuring health benefits are more common among larger employers because they can spread risk over a larger number of enrollees.

2. Individually-purchased insurance coverage: An individual can purchase private health coverage for themselves and their family without the involvement of their employer, referred to as “nongroup” coverage. Every state has an “individual insurance market” that consists of the following:

• Marketplace. The ACA required the creation of health insurance Marketplaces in each state, where individuals can purchase insurance, with federal financial assistance for premiums and cost sharing if eligible. The coverage purchased from a Marketplace must meet certain minimum standards, including coverage of essential health benefits, no preexisting condition exclusions, and limits on varying premiums based on health status (“ACA-compliant” insurance). (See the ACA chapter for more information.)
• Off Marketplace. People can also purchase individual insurance outside the Marketplace where federal financial assistance is unavailable. This could include ACA-compliant plans similar to those offered on the health insurance Marketplaces, and other types of coverage or financial products with lower premiums, but less comprehensive coverage than ACA-compliant plans, such as short-term limited duration coverage, fixed and hospital indemnity arrangements, health care sharing ministries, and others.

3. Other Sources of Private Health Coverage: Other sources of health coverage subject to unique regulatory standards include health coverage provided through entities called “multiple employer welfare arrangements” (MEWAs), “church plans,” and coverage provided by colleges and universities for their students.

• A MEWA is generally any arrangement that provides benefits – in this case, health benefits – to employees of more than one unrelated employer. Historically, MEWAs have been vehicles for organizations to market less expensive health benefits to groups of employers, especially small employers. To address a history of MEWA insolvencies attributed to a lack of proper government oversight, changes to ERISA in 1983 created a complicated regulatory regime just for MEWAs, subjecting them to a mix of federal and state laws.
• One type of MEWA, also governed by ERISA, allows groups of more than one employer to sponsor health coverage for their employees, known as an “Association Health Plan.” Traditionally, these types of plans have been available to groups of small employers in a similar industry, such as those who sell real estate or work in a similar profession. In recent years, federal efforts to expand the criteria for what types of employers may form an AHP have been the subject of litigation and regulations.
• Church plans are offered to employees by a church or association of churches, including entities controlled by or associated with a religion, such as religiously-affiliated hospitals and schools. Unlike other employer-sponsored plans, church plans are exempt from most ERISA requirements and some of the ACA’s health reforms. These regulatory gaps in church plans, including coverage of contraception, have been the subject of numerous legal proceedings.
• A student health plan is any health coverage sponsored by a college or university for students. While it is not group coverage, it can be sponsored by a university in the same way employers sponsor health coverage. The ACA has special rules for this coverage. While an insured arrangement is considered individual market coverage, exceptions allow it to be provided without the insurer having to meet certain ACA market rules. A university can also sponsor a self-insured health plan for students. These arrangements do not have to meet the ACA’s market rules, although states may regulate them.

Most private plans utilize a “network” of health care providers and hospitals, with some plans requiring a referral from a primary care provider (PCP) for enrollees to see a specialist. These types of arrangements, referred to as “managed care plans,” attempt to control costs and utilization through financial incentives, development of treatment protocols, prior authorization rules, and (in limited circumstances) dissemination of information on the quality of provider practices. Most private health coverage, whether employer-sponsored or individually purchased, falls into one of the following types:

All of these plan types are available in the individual market, both on and off the Marketplace. Most employers that offer health benefits offer just one type of health plan, though larger firms may offer more. PPOs are the most common type of health plan offered by employers.

Other employer-sponsored health coverage arrangements: Employers also can offer a Health Reimbursement Arrangement (HRA), which is an employer-funded group health plan, sometimes paired with a high-deductible health plan (HDHP), that reimburses an employee up to a certain amount for qualified medical expenses and, in some instances, health insurance premiums. Reimbursements are tax-free to the employee, and amounts in the account can carry over to the following year, but employees lose any amounts when they leave the employer. Other variations of HRAs include an Individual Coverage HRA (ICHRA), where an employee can use funds in the HRA to purchase individual insurance either on or off the Marketplace. Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) are HRAs that certain small employers can make available for tax-free reimbursement of certain expenses.

Health Savings Accounts (HSAs): HSAs are tax-advantaged savings accounts that enrollees in certain HDHPs can use to pay for qualified medical expenses. While the HDHP associated with an HSA is usually sponsored by an employer or obtained through a Marketplace plan, the HSA itself is not usually considered employer-sponsored coverage (in contrast to HRAs). HSAs are owned by the individual and are portable, meaning consumers can carry them from job to job and use them after retirement.

Value-Based Arrangements: Some private health plans utilize “value-based” coverage and alternative payment models. These designs, primarily used in federal Medicare and Medicaid demonstration projects, aim to make providers more accountable for patient outcomes through various financial and other incentives. The objective of value-based care design is to shift the fee-for-service reimbursement model of paying for care based on “volume” to a system that pays based on the “value” of a service. Demonstration results to date have not shown major savings, but these designs are still discussed as a potential cost-containment tool for private health coverage. Payers and providers have also looked to value-based payment models to improve health disparities and to provide more patient-centered care.

The regulatory framework for private health coverage has evolved into a complicated system of overlapping state and federal standards. This federalism framework creates a sometimes precarious “marriage” between state and federal authority in order to implement health policy goals.

1. States lead on insurance regulation, but with a federal fallback for most protections.

The regulation of insurance has traditionally been a state responsibility. States license entities that offer private health insurance and have a range of insurance standards, including financial requirements unique to state law. However, the federal government has played an increasingly significant regulatory role over the past 50 years.

The federal pension law, ERISA, passed in 1974, applies to insured and self-insured private employer-sponsored health coverage with similar legal and enforcement mechanisms to protect individuals covered by private group health plans as those created for pension plans.

Separately, the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) created new federal requirements and the basic framework for how state and federal law now interact. Under this “federal fallback” structure, states may require that insurers in the group and individual market (as well as state and local government self-insured plans) implement federal requirements on health coverage. If a state fails to “substantially enforce” the federal requirements, the federal government will enforce those protections. The federal fallback framework was intended to allow states to continue to regulate private coverage while ensuring that all consumers nationwide have a floor of federal protections when a state fails to implement them.

The federal fallback framework does not apply to self-insured employer-sponsored coverage. The U.S. Department of Labor (DOL) almost exclusively regulates private self-insured employer-sponsored plans. The Center for Medicare and Medicaid Services (CMS) directly enforces federal protections against state and local government self-insured employer plans (although states can also do so).

2. ERISA limits the application of state law for those with private employer-sponsored coverage.

ERISA specifically “preempts” or prevents state law from applying to most self-insured group health plans, limiting the scope and application of state protections for many Americans covered by employer-sponsored plans.

Aspects of this preemption have been the topic of almost 50 years of litigation, resulting in three overall conclusions:

• Most state insurance laws, including state benefit mandates, don’t apply to self-insured ERISA plans, resulting in fewer regulatory requirements on these plans than on fully-insured plans.
• State insurance laws generally do apply to fully-insured ERISA plans.
• ERISA provides exclusive, yet limited, civil remedies for enrollees in ERISA plans who are harmed due to a violation of the law.

Today, some argue that ERISA preemption sustains the employer-based health coverage system because meeting an ever-growing list of state laws would be costly for employers, particularly those with employees in multiple states. Having national uniform standards, they argue, provides employers with an incentive to offer coverage. Others argue that preemption handcuffs states’ ability to protect consumers and control health care costs and that it is no longer needed given the ACA’s employer shared responsibility provision for larger employers and the increased regulation that applies a variety of rules to both fully-insured and self-insured plans. Prospects for change are limited, but some have explored the possibility of alternative approaches.

3.  Federal regulation of private health coverage can differ based on the market/source of coverage.

Private health insurance regulations vary based on the insurance market and the source of coverage. This is in part due to ERISA preemption and the ACA, which applies many reforms only to the individual and small-group markets.

Further complicating this are plans that existed before the ACA was passed, called “grandfathered” plans, that do not have to meet many of the ACA standards, so long as no significant changes in cost sharing and benefits are made to the plan.

The ACA did, however, alter federal law to create a large number of consumer protections that apply many of the same regulatory requirements across almost all sources of private health coverage. (See Table 7.)

Finally, some federal standards only apply to employer-sponsored plans (insured and self-insured) that are governed by ERISA, such as the requirement on employers with 20 or more employees to provide temporary continuation of coverage in certain situations, known as COBRA, which also applies to certain state and local government employers. There are also obligations on plan “fiduciaries” that are unique to ERISA plans.

This all means consumers can have different legal protections with their private coverage based on their coverage type and the state where they live.

4. Special exceptions in regulations allow certain types of private coverage to avoid having to meet many insurance protections.

Some private plans are specifically exempt from most federal private health coverage protections, including the ACA. These forms of coverage are often called “non-ACA compliant” coverage. While “non-ACA compliant” does not automatically mean it is illegal or inappropriate, some forms of this coverage have come under increasing scrutiny by federal and state authorities due to their gaps in consumer protections.

These types of coverage fall into these general categories:

• Coverage that is an “excepted benefit” is specifically carved out of most of the ACA and other federal requirements. Some are considered health coverage under federal law, such as certain dental and vision benefits, and other forms of coverage may not be, such as fixed and hospital indemnity, cancer-only coverage, accidental death and dismemberment, and long-term care coverage. (This Health Affairs article provides a more detailed description of excepted benefits.)
• Short-term limited-duration coverage and other forms of coverage are not regulated as health insurance under federal rules (as mentioned in the previous section).
• Employer-sponsored plans with less than two participants who are current employees. This exception was included in the 1996 HIPAA law and has been interpreted as excluding employer-sponsored plans that cover only retirees from many federal insurance requirements.

Some of these forms of coverage are the focus of business promoters looking to market cheaper, largely unregulated forms of coverage. In some instances, this coverage might be promoted by unscrupulous actors who falsely market the coverage as meeting ACA requirements or as providing comprehensive coverage. In other cases, coverage is sold as supplemental “health” coverage along with ACA-compliant health insurance, sometimes with very high deductibles. These exceptions to the ACA’s broad coverage requirements can operate as loopholes in the implementation of consumer health coverage protections and may create ambiguities for consumers as well as employers.

5. Tax regulation matters for cost and access to health care and coverage.

Central to evaluating how private coverage works are the tax subsidies that reduce the cost of coverage and benefits, which can incentivize employers to sponsor and individuals to purchase private health coverage. Tax regulations also interpret what medical expenses (as opposed to general wellness or other non-medical expenses) get a tax preference.

The largest health care tax subsidy is applied to employer-sponsored coverage. Tax-exempt employer contributions for medical insurance premiums and medical care resulted in more than $224 billion in lost revenue for the federal government in 2022. Employer-sponsored health coverage is excluded from federal income tax, as well as federal employment taxes (and equivalent state taxes). The exclusion also applies to amounts reimbursed to employees by an employer under arrangements called “health flexible spending arrangements” (health FSAs), where an employee elects to have amounts withheld from their wages to pay for medical expenses. The exclusion provides considerable tax savings for employers and employees making contributions toward health coverage. The value of this exclusion increases as income increases, making income tax savings greater for higher-income individuals than for lower-income individuals. For various policy reasons, including to rein in health care costs, there have been efforts to change or cap this exclusion over the years, but to date, none have been successful. The most recent, the “Cadillac tax” provision of the ACA, was removed from the law before it was implemented (see the Employer-Sponsored Health Insurance chapter).

Additionally, the ACA created refundable tax credits based on household income to help individuals purchase coverage on a health insurance Marketplace (see the Affordable Care Act chapter). In contrast to the employer exclusion, tax subsidies for Marketplace participants are higher for those with lower incomes. Temporary increases in these credit amounts, passed as part of the American Rescue Plan and the Inflation Reduction Act, have led to record Marketplace enrollment. Unless Congress extends them, the temporary increases expire at the end of 2025. Unlike employer-sponsored insurance, Marketplace enrollees who pay a premium for their individual market insurance coverage generally do so with after-tax dollars (although an employer can sponsor tax-advantaged ICHRAs or QSEHRAs, as described above, to help employees pay for Marketplace and other individual market coverage).

In addition to the tax advantages related to employer-sponsored health coverage and tax subsidies received by lower-income individuals with Marketplace coverage, HSAs bring their own set of tax advantages for those who use funds in the account to pay for cost sharing and for items the IRS includes as qualified medical expenses. In 2025, a federal budget reconciliation law was enacted that may increase the use of HSAs.

The scope and extent of federal regulation affecting private health coverage has vastly increased, especially with the passage of the Affordable Care Act (ACA) in 2010. The ACA largely retained the framework for the regulation of private coverage, adding a long list of new provisions to different regulated pieces of our fragmented health care system. This means specific and overlapping requirements on insurers, employer-sponsored plans, and, more recently, in the No Surprises Act, also on providers.

The ACA also unleashed a firestorm of activity resulting from longstanding political and philosophical differences on the role of federal government regulation of health care. Efforts to repeal and replace the ACA in 2017, several U.S. Supreme Court cases challenging ACA provisions, and hundreds of other cases in the lower courts on the ACA and other federal requirements mean the law in this area has and will continue to be in flux.

Regulatory priorities can and have shifted depending on what party controls the White House and Congress, resulting in ever-changing federal standards. This section reviews the current landscape of federal requirements. A discussion of every single relevant federal regulation is beyond the scope of this chapter, but the major requirements have been divided into six categories:

• Access to health coverage
• Affordability of health coverage
• Benefit design and adequacy
• Reporting and disclosure of information concerning coverage
• Review and appeal of health claims
• Other federal standards

1. Access to coverage

Federal health care reform has prioritized expanding health coverage to those without it for quite some time, especially for those not eligible for a public program such as Medicaid or Medicare, or who do not have coverage through their current employer. Prior to the passage of the Affordable Care Act in 2010, state laws and regulations were designed to address the potential for adverse selection in health insurance by allowing insurers to engage in certain practices such as “underwriting,” which allowed insurers in the individual and group markets to decline to cover or renew coverage due to a person’s health status or a group’s claims history, and helped plans maintain predictable and stable risk pools. Further, an insurer could cover the applicant, but charge a higher premium based on age, health status, gender, occupation, or geographic location. In addition, insurers could exclude benefits for certain health conditions if the person was diagnosed or treated for that condition before becoming insured (a “preexisting condition exclusion”).

States made some reforms, particularly in the small group market, to address these barriers to coverage. Some of these changes became part of the federal Health Insurance Portability and Accountability Act (HIPAA) of 1996. However, it was not until the ACA that the regulation of private insurance, at least for the individual and small group markets, was fundamentally changed.

Core Private Insurance Coverage Protections. The ACA established core market rules designed to expand coverage to most people in the U.S. New ACA legal requirements include:

Requirements for premium stabilization and other efforts to protect the risk pool. The ACA’s private insurance market regulations also ushered in concerns that its protections, including guaranteed issue and the elimination of health underwriting for some coverage, would result in adverse selection (discussed in the first section). Regulatory efforts to prevent adverse selection have also focused on certain plans and products that do not have to meet most of the ACA rules, such as short-term limited-duration plans. Non-ACA-compliant coverage may be attractive to consumers looking for lower monthly costs, but these plans can leave consumers underinsured and may compromise the risk pool by drawing out healthier individuals.

Federal guidance and regulation aimed at protecting the risk pool as part of the ACA include:

Standards to prevent coverage gaps. Access to coverage is also enhanced by federal requirements to provide for the continuity of coverage or care to prevent gaps for those who do or could lose coverage, including:

2. Financial Protection and Affordability

High costs, in the form of both premiums and cost sharing, have been a defining feature of employer-sponsored and individually-purchased (for unsubsidized enrollees) health coverage. Federal reforms have sought to address the stability and affordability of health insurance. Key provisions include:

3. Benefit Design and Adequacy

Federal requirements also include a list of minimum standards for how a plan is designed or operated in an effort to ensure that enrollees have coverage that is comprehensive enough to cover medically necessary care, with processes that do not unnecessarily limit access to covered benefits. Such requirements include laws that prohibit plans from imposing annual dollar limits on coverage or requiring waiting periods longer than 90 days before employer-sponsored coverage kicks in. States may have additional benefit mandates for state-regulated plans, such as comprehensive coverage requirements for mental health or substance use disorders or fertility services.

Required coverage.

The ACA requires all private, non-grandfathered health plans to cover preventive services with no cost sharing for enrollees. These requirements change over time as preventive service recommendations are updated and new services are added. In general, these include:

The preventive care coverage requirement has been the subject of extensive litigation since the ACA was passed. KFF briefs provide more detail on this litigation and a 2025 U.S. Supreme Court decision involving ACA preventive care standards. The contraceptive coverage requirement has been the topic of two U.S. Supreme Court cases and several regulations, now allowing employers to not cover contraception if they have a religious objection.

Other required design standards across most health plans.

Large group, small group, individual, and self-insured health plans are required to abide by other benefit design standards that aim to contain out-of-pocket costs and improve access to quality care. These design standards include:

Design standards limited to individual and small group plans. Federal requirements on health plan design standards for certain segments of the individual and small-group markets have evolved since the ACA was passed. Plans must meet these rules as part of annual certification requirements for qualified health plans. Examples of these standards include:

4. Disclosure, Reporting and Transparency

The 2023 KFF Survey of Consumer Experiences with Health Insurance found that most Marketplace and employer-sponsored insurance (ESI) enrollees reported difficulty understanding some aspect of their health insurance compared to consumers enrolled in Medicaid and Medicare:

Lack of information or understanding about key features of an individual’s health coverage can put patients at financial risk and result in negative health outcomes. Employers and other health purchasers have also struggled to get the information they need to make prudent decisions about cost-effective coverage options and hold their service providers accountable for their plan designs, contracting, and administration activities. Regulations have increased over time to make more information available to enrollees or prospective enrollees, as well as to federal agencies to conduct their oversight responsibilities. What to disclose and how much information is useful is a continuing policy challenge.

Most federal disclosure, reporting, and transparency requirements fall into two categories: Disclosure of information to enrollees and/or the public (Table 9) and reporting to the federal government (Table 10). Note that the requirements provided in these tables are not exhaustive, but include examples of some of the main reporting, disclosure, and transparency requirements that plans, providers, and facilities are subject to.

Ongoing reporting by private plans to federal agencies is a tool for agency oversight to assess compliance with regulations and evaluate trends. In some instances, agencies are required to use this information to report aggregate information to the public and Congress.

5. Claims and Appeals Processes

Access to a fair system of review for consumer grievances about plan actions and claims denials has been a key element of federal consumer protection.

A 1997 Clinton Administration initiative, the Patient Bill of Rights, resulted in several federal agencies taking regulatory actions to enhance consumer protections for patients and workers. As part of this initiative, the DOL updated claims and appeals rules that applied to private-sector employer plans regulated by ERISA to make the claims review process:

• Faster (shortened timeframe for plans to make a decision on claims and appeals)
• Fairer (ensure plan decision makers were free of conflicts of interest)
• Fuller (more transparent through the disclosure of more information to consumers–including language access standards–about the reason for a claim denial)

The DOL issued regulations in 2000 governing the “internal” claims review process, conducted internally by a plan or plan-sponsor employer. For the first time, these updated rules accounted for managed care features such as prior authorization, where health plans determine medical necessity before the plan covers an item or service, requiring, for example, shorter time frames for claim decisions and appeals for these “pre-service” claims.

These rules were the basis for reforms applied across all private health coverage in the ACA. These reforms established a federal floor of protections for the internal claims and appeals process and added an option for consumers to appeal denied claims through an “external review” by an entity independent of the plan. Only certain types of claims, such as those that involve clinical judgment, are eligible for external review.

Policymakers have renewed scrutiny of the prior authorization process, as well as claims review and appeals generally. Claims and appeals standards that apply to Medicare Advantage plans, Medicaid, and some Marketplace plans were updated in 2024 to reduce delays in decision-making and to provide more transparency about the outcomes of claims and appeals decisions.

6. Other Federal Standards

Several other federal laws and regulations provide consumer protections in private health insurance, often indirectly, that sometimes have stronger enforcement mechanisms and penalties than federal insurance laws. These include:

Civil Rights Law. The Civil Rights Act of 1964 (and later amendments to it, including the Pregnancy Nondiscrimination Act) and the Americans With Disabilities Act of 1990 created protections against discrimination based on race, color, national origin, sex, age, and disability. At a minimum, these standards apply to employers with 15 or more employees, and, in effect, regulate those employers’ group health plan coverage.

Section 1557 of the ACA is a nondiscrimination provision that potentially applies many existing civil rights laws directly to health care entities, including insurers that receive federal funds. The extent of its reach has been the subject of several sets of regulations, with the iteration issued by the Biden administration addressing Section 1557’s ban on sex discrimination (among other issues) and reinstating protections against discrimination for LGBTQ+ people seeking health care and coverage, including for gender-affirming care. Trump administration actions will likely seek to undo this requirement and place restrictions on gender affirming care that the courts will be tasked with evaluating in the years to come.

Antitrust Laws. Antitrust laws in health care prohibit anticompetitive practices and mergers by health care providers, hospitals, and insurers, which can reduce competition and increase prices. As provider consolidation increases, federal agencies such as the Department of Justice (DOJ) and the Federal Trade Commission (FTC) have engaged in enforcement initiatives in recent years. Health insurers have also faced antitrust scrutiny as the market shares of the largest health insurers continue to dominate in most locations. Oversight of pharmacy benefit managers, now mostly owned by or affiliated with the largest health insurers, is one area of focus where Congress continues to debate whether additional standards are warranted, and state attorneys General are increasingly focusing their attention.

Privacy Laws. As digital health technology has advanced, so have concerns about protecting consumer health information, as the fast development of new technology (e.g., health-related apps, artificial intelligence) has made it difficult for regulation to keep up. The leading federal privacy requirements for health plans’ use of certain patient information, set out in HIPAA regulations, are now almost 25 years old. Efforts to update this regulation have been discussed, but have not yet been finalized. Updates to the HIPAA privacy rules were proposed toward the end of the first Trump administration. Updates to HIPAA’s security standards were proposed at the end of the Biden administration. It is unclear whether renewed proposals in this area are imminent. Regulatory changes to HIPAA in 2023 aimed at clarifying reproductive health care privacy were struck down by a federal court in 2025. The FTC has sought to regulate areas not covered directly by HIPAA, such as software applications increasingly marketed as part of health coverage. Continuing federal efforts to advance electronic information sharing (known as “interoperability”) will mean renewed calls for increased federal privacy and security protections.

Special privacy protections for substance use disorder information are regulated under a law known as “Part 2.” This law aims to protect the confidentiality of this information while still allowing providers to share patients’ mental health and substance use disorder information with plans and others to coordinate care and administer benefits.

Gag Clauses. Plans and issuers are prohibited from entering into an agreement with a provider, third-party administrator, or other service provider (including pharmacy benefit managers) that restricts the plan and issuer from accessing claim, cost, or quality information on providers, enrollees, plan sponsors, and other entities, known as a “gag clause.” Plans and issuers must annually submit an attestation of compliance with these requirements to the federal government.

Three federal agencies have overlapping jurisdiction for most federal regulation of private health plans: the U.S. Department of Health and Human Services (HHS), the U.S. Department of Labor (DOL), and the U.S. Treasury Department. Through a structure created by HIPAA in 1996, these three agencies jointly issue regulations and other guidance on laws passed by Congress that place the same or similar standards across all private plans.

The same or similar federal requirements for private health plans are typically contained in three separate statutes that each agency oversees:

As an example, if Congress passes a federal law that requires all insurers of individual and group coverage and all employer-sponsored plans to meet a certain standard, any regulations issued to implement that standard are usually issued jointly by HHS, DOL, and Treasury with separate but identical language added to the Public Health Service Act (PHSA), ERISA, and the Internal Revenue Code (IRC). However, each agency has its own requirements for how these laws are enforced. In addition to these overlapping authorities, each of these three agencies has exclusive federal authority over certain aspects of private health insurance regulation (though the federal authority might be shared with states in some instances):

Other agencies with important oversight roles of private health coverage include:

• HHS’s Office of Civil Rights: Implements HIPAA’s administrative simplification standards; ACA section 1557 nondiscrimination rules
• HHS’s Office of the National Coordinator: Coordinates efforts to implement and use health information technology and health information exchange
• HHS’s Food and Drug Administration: Regulates clinical investigations and supervises the safety of pharmaceutical drugs, biological products, and medical devices
• Department of Justice: Antitrust enforcement
• Federal Trade Commission: Antitrust enforcement
• Equal Employment Opportunity Commission (EEOC): Nondiscrimination in health coverage and wellness program standards

As the executive branch of the U.S. government, the federal government has the authority to execute laws passed by Congress and signed by the President, including issuing regulations to operationalize and implement a statute. In addition, specific agencies have the authority to investigate violations of the law and enforce the law through policy form review, market conduct exams, assessment of penalties, and/or bringing a court action to stop an insurer from violating the law (called an injunction).

Regulations and Other Guidance

Process: The federal regulatory process is governed primarily by the Administrative Procedure Act (APA). This law, along with specific executive orders, governs the process known as “notice and comment rulemaking,” where regulations are proposed (through a notice of proposed rulemaking or “NPRM”) and are subject to public comment for a certain period of time and then finalized. The process is administered by the Office of Management and Budget (OMB), an agency within the Executive Office of the President. The OMB’s Office of Information and Regulatory Affairs (OIRA) coordinates the review and release of regulations from the agencies. Regulations are published in the Federal Register, a daily publication of regulations and notices. Information about regulations under OIRA review is available by agency at Reginfo.gov, and the public can view all regulations and comment letters at Regulations.gov. Twice a year, OMB issues a regulatory agenda of regulations agencies expect to publish in the coming months.

Authority: Once a regulation has gone through the notice and comment process and a final rule is issued, it is generally considered to have the force of law, meaning private actors must comply with it, and individuals can rely on having the protections set out in the law and the regulation. However, regulations are subject to legal challenge under the APA if they are inconsistent with the statute.

Review of regulations by courts: Traditionally, if a regulation interprets a part of a statute that was not clear as drafted by Congress, and a federal court reviews a challenge to the regulation, the court would uphold the interpretation in a regulation unless it is unreasonable or arbitrary. Essentially, courts deferred to the expertise of government regulators and the regulatory review process to uphold a regulatory requirement if they deemed the interpretation reasonable. This practice is called “Chevron deference,” named after a Supreme Court case from 1984, Chevron v. Natural Resources Defense Council, that set out the framework for court review of ambiguous language in a statute. This standard of review can result in agencies having discretion to implement policy changes through the interpretation of regulation. That discretion was challenged in recent years as too broad, giving regulators too much authority, and in June 2024, the U.S. Supreme Court overruled its previous decision, meaning federal courts are no longer required to defer to regulations of administrative agencies in circumstances where they traditionally would have. Eliminating Chevron deference could weaken the impact of regulation on public policy and shift more policy decisions to courts.

Sub-regulatory guidance: Other types of information and guidance commonly issued by a federal agency that do not go through the formal regulatory notice and comment process are referred to as “sub-regulatory.” Information and interpretation in sub-regulatory guidance usually do not have the force of law as regulations do, and typically do not create legally binding obligations on private parties. They are, however, useful in quickly communicating information to regulated entities and the public to signal how and when the agency plans to implement a new law, and the timing of that implementation. However, reliance on these types of guidance by consumers has its limits since regulated entities might still assert that this type of guidance is not binding on them. Examples of sub-regulatory guidance include:

• Frequently asked questions, manuals, memos, and letters used by CMS, DOL, and the IRS: Certain provisions of the ACA have been the subject of numerous sub-regulatory guidance, including over 60 pieces of guidance in the form of frequently asked questions issued jointly by CMS, DOL, and the IRS. Sub-regulatory guidance also includes implementation manuals, policy letters, and enforcement memos.
• Advisory opinion or information letters: The DOL and IRS have used advisory or information letters and chief counsel notices to address fact-specific questions at the request of regulated entities. DOL and IRS responses to these inquiries only apply to the specific parties and scenarios addressed, so they can’t be relied on by the public and can create ambiguities about what the law requires, which can remain unresolved for years until formal regulations are finalized. Note that the IRS also has several other types of guidance with varying levels of authority.

Enforcement

Given the federal fallback framework described in previous sections, the enforcement mechanism for most federal requirements on private coverage depends on the type of health plan and the federal agency enforcing the requirement, as summarized in Table 13 below.

Government enforcement. Under the existing federal fallback framework, CMS has developed a process for determining whether a state is substantially enforcing each specific federal insurance protection. This means that whether a state or CMS is responsible for enforcement can differ for each health coverage standard, resulting in a patchwork of federal and state enforcement responsibilities. In addition, both the DOL and the IRS each have their own separate enforcement processes for the federal standards they implement.

Private Right of Action and Remedies. Some laws also allow individual consumers or their representatives to bring a lawsuit independent of the government to address a violation. These laws may detail what types of “remedies” are available if the challenge is successful—for example, an injunction to stop a violation, a civil penalty, or compensatory or punitive damages. Without this “private right of action,” aggrieved consumers must rely solely on the government to act to address a violation of the law. Even federal laws, such as ERISA, that allow individual consumers to bring a lawsuit to resolve certain disputes, have limited remedies to address a violation. ERISA does not generally allow monetary damages as a remedy.

The federal fallback framework also applies to most of the requirements on health care providers and facilities that are now part of federal law. In 2020, Congress passed and President Trump signed the Consolidated Appropriations Act (CAA), which includes new protections on balanced billing (the No Surprises Act) and various provider rules regarding disclosure and transparency. States are expected to enforce these standards against providers, with CMS as the federal fallback. State health departments or state agencies that oversee provider and facility licensing and practice standards oversee these rules. CMS has surveyed states and entered into collaborative enforcement agreements with each state, including which CAA rules the state is prepared to enforce and which ones CMS will need to implement. CMS can assess a penalty of up to $10,000 per violation against a provider or facility for non-compliance.

Enforcement of other standards. Outside of the above federal fallback framework, each agency has its own separate enforcement mechanisms for the laws it implements alone. For instance, HHS has the authority to assess fines under HIPAA privacy rules for violations, but individuals harmed by a HIPAA violation do not have a private right of action under that law. Enforcement processes and remedies available under federal nondiscrimination requirements under the Civil Rights Act or the Americans with Disabilities Act vary, but some include monetary damages in the form of compensatory damages.

The McCarran-Ferguson Act, enacted by Congress in 1945, clarified that states have the primary role in regulating the business of insurance. Although changes have since been made to that law, states have several mechanisms in place to regulate insurance. States license entities that offer private health coverage in a process that reviews the insurer’s finances, management, and business practices to ensure it can provide the coverage promised to enrollees. States also license the insurance agents and brokers in the state (see the section “What Is the Role of Health Insurance Brokers and Other Assisters?” for more information).

State insurance laws and regulations vary by state, though commonly include:

Most states require health plans to provide specific data that is included in the state’s all-payer claims databases (APCDs). These are state databases that include medical, pharmacy, and often dental claims, as well as eligibility and provider files collected from and aggregated across all private and public payers in a state. APCDs can provide states with a perspective on cost, service utilization, and quality of health care services across the full spectrum of payers in a state, which can be a tool in state efforts to control health care costs and promote value-based care.

Some states are also developing additional state-level regulations related to health plan network adequacy, health plan price transparency, public option plans, reinsurance programs, and more. These state-level regulations and protections do not apply to enrollees in self-insured plans offered by private employers (see the section “What is Private Health Insurance” for more information). However, these enrollees may have some of these protections through other federal laws and regulations.

State legislatures enact state insurance laws and typically grant regulatory authority to the state’s insurance regulator/commissioner. State enforcement mechanisms vary widely by state, regulation, state resources, and staffing capacity. Shifting political priorities at the state level can also influence enforcement priorities and actions. For example, state insurance agencies may ensure compliance with certain benefit mandates by primarily relying on complaints from consumers, consumer advocates, or health care providers to trigger a compliance review of the plan in question, while other state insurance agencies conduct periodic systematic reviews of all plans subject to the law or regulation.

Navigating an increasingly complicated health coverage landscape has increased the focus on the availability and expertise of entities that assist purchasers of health coverage (consumers and employers). Assisters can include agents and brokers who are paid commissions from insurers, as well as consumer assistance programs created by the ACA, which are often publicly funded and nonprofit, who may provide similar assistance as agents and brokers, but also specialize in individuals transitioning in and out of public programs such as Medicaid or assisting those without insurance to find coverage.

Agents and brokers have long played a significant role in connecting individuals and employers to private health coverage by helping them understand health insurance options and costs. An “agent” typically represents a single insurer and provides information about that insurer’s coverage options. A “broker” is not aligned with any one insurer but could, in theory, place coverage from any insurer selling products in a state.

Agents and brokers assist individuals in choosing a qualified health plan on a health insurance Marketplace. Their role in Marketplace enrollment has grown over the years. In the 2024 plan year, 78% of ACA coverage was sold through health insurance agents compared to 43% in 2016. Web brokers, who facilitate plan selection online through Marketplace capabilities, have also played a large role in Marketplace enrollment.

Agents and brokers in the health insurance Marketplace have faced scrutiny for alleged fraudulent activity in recent years due to consumer reports of unauthorized enrollment and plan switches by agents and brokers. In response, CMS, under President Biden, began requiring additional steps to be taken before agents and brokers can make changes to a consumer’s HealthCare.gov enrollment, and hundreds of agents’ and brokers’ Marketplace agreements were suspended for reasonable suspicion of fraudulent activity. In an attempt to address Marketplace fraud, the Trump administration finalized a regulation in 2025 that, along with the 2025 budget reconciliation law, creates new administrative hurdles for consumers to enroll in Marketplace coverage and receive premium tax credits. These 2025 actions made few changes to broker oversight requirements for Marketplace plans. The Trump administration also reinstated many agents and brokers suspended in recent years, and federal indictments related to broker fraud for actions that allegedly occurred as far back as 2018 still await resolution.

Even before the creation of the Marketplaces, agents and brokers had been selling coverage in the individual and group insurance market, especially to small employers needing expertise in finding health insurance for their employees. Large employers also use agents and brokers, who often work for employee benefit consultants or brokerage firms and receive commissions (or, in some cases, a fixed fee) to find vendors to support their self-insured group health plan or for placing other forms of insurance that they provide or make available to employees as “voluntary” benefits.

Broker Compensation Reporting. Employer plans governed by ERISA must meet ERISA fiduciary standards. These standards prohibit plans from contracting with a “party-in-interest,” which is an entity that may have a conflict of interest because it is receiving compensation from a third party for activity it is doing for the employer plan. For instance, a benefits consultant may be helping an employer find a third-party administrator (TPA) for its group health plan, and the consultant is paid by the employer for their work but also gets a commission from the TPA if the employer decides to use its services. Employers are prohibited from entering into this type of transaction with the consultant unless they can show it was done in a “reasonable manner.”

Under rules added to ERISA by the CAA, one way an employer plan can demonstrate that its contract with a broker/consultant is reasonable is to show that it received information from the broker/consultant about the compensation the broker/consultant received from the TPA. Under these rules, an employer plan fiduciary violates ERISA if it does not receive from a broker or consultant information about the direct and indirect compensation the broker receives. Also, insurers offering individual insurance (on- and off-Marketplace) and those offering short-term limited-duration plans must disclose to enrollees and report to CMS any direct or indirect compensation they pay to agents and brokers for enrolling individuals in this coverage.

Consumer Assistance Programs. The ACA required the creation of other types of assisters to assist consumers with enrollment, plan selection, insurance problems, and, in some cases, post-enrollment support. These programs must provide impartial, no-cost help to consumers and cannot be affiliated with an insurance company.

Navigator programs, which are federally funded through grants, were created to raise public awareness and assist individuals in enrolling in qualified health plans as well as provide post-enrollment support. Navigators participate in trainings and are required to be knowledgeable in eligibility and enrollment rules and available QHP options, and maintain privacy and security standards. In 2025, CMS announced a 90% cut in Navigator funding, the largest funding cut since the program began. The current plan year funding of $100 million will be reduced to $10 million for 2026. These cuts come as enhanced Marketplace subsidies are set to expire at the end of 2025 and federal cuts to Medicaid begin to take effect in 2026, both of which could result in significant coverage losses.

Related assisters include Certified Application Counselors (CACs) who also assist consumers in resolving insurance issues and identifying the coverage option that best suits their needs. CACs, however, are not required to meet the same standards as Navigators or participate in all of the activities required of Navigators (e.g., providing post-enrollment assistance). In states using the federally-facilitated Marketplace (FFM), CACs are overseen by Certified Application Counselor Designated Organizations (CDOs), which are designated by CMS and include organizations such as community health centers, hospitals, and social services agencies. To serve as a CAC in an FFM state, the individual must be affiliated with a CDO and is typically a staff member or volunteer. CACs are not federally funded and instead rely primarily on outside non-profit organizations and foundations. 

The ACA also established Consumer Assistance Programs (CAPs) to assist consumers with insurance problems and identify their best options for health coverage. Unlike the Navigator program, which was specifically created to assist Marketplace, Medicaid, and CHIP consumers, CAP programs also assist consumers with employer-sponsored coverage and other types of coverage. The ACA provided an initial appropriation for CAPs, which 35 states and Washington, D.C., took advantage of, but CAP programs have received no federal funding since 2012. Many states have continued their CAP programs using their own funds, but others have discontinued their operations.

2025 and beyond will likely see a retrenchment in regulation at the federal level that could impact the private coverage gains of the last decade. While states will still play a significant role in regulating private health insurance, the fragmented structure of private health care regulation and enforcement means that states alone are limited in what they can do to affect national change or influence private employer-based coverage, where most insured Americans under 65 get their coverage. The future regulatory outlook for private health coverage will be shaped by the following three key features:

Deregulation and Litigation. The Trump administration has put in motion, through several executive orders and other actions, deregulation across the health care sector. For example, a January 2025 executive order required that for every new regulation promulgated, federal agencies must identify at least ten existing regulations to repeal, which could impede future rulemaking. Another executive order required all federal agencies to coordinate with the president’s Department of Government Efficiency (DOGE) to review all regulations to make sure they are consistent with “law and Administration policy.” Using this executive order, the Trump administration has limited the enforcement of final regulations on mental health parity and short-term, limited-duration plans. Also in February 2025, President Trump issued an executive order that rescinded several executive orders issued by President Biden, including one aimed at strengthening the ACA.

These types of regulatory rescissions and a general deregulatory executive agenda, along with disruptions in agency structure and the personnel layoffs in the federal health care agencies, could have long-term impacts on private health care regulation. The outcome of court challenges to many of these deregulatory actions will determine future developments. In addition, changes in how courts review agency decisions—that is, the major decisions by the Supreme Court to limit agency discretion—could be a barrier to the Trump administration’s deregulation initiatives, as federal courts now have more power to second-guess policy decisions of the President. Look for attempts at codifying the Trump administration’s priorities through congressional action to get past any court barriers. Also, expect to see more actions from this administration through executive orders, voluntary industry agreements, and sub-regulatory guidance (e.g., advisory opinions that approve various industry arrangements). Changing enforcement priorities for federal agencies could leave patients looking to state and private mechanisms to get the protections written in federal law.

Technology Advancements. Expect wide-ranging recommendations from major stakeholders on which aspects of artificial intelligence (AI) and telehealth should be promoted and protected from federal regulation. The Trump administration has already announced its plans to speed up the development of AI and reduce regulation. With limited federal regulation anticipated during this administration, much of the future outlook for consumer protections will depend on the voluntary actions of industry and how transparent those activities are. For example, in July 2025, the Trump administration announced a new voluntary initiative aimed at enhancing health data interchange (known as “interoperability”) and expanding patients’ access to their own health data and reported that more than 60 companies had pledged to participate. Open questions about data privacy, security, and accuracy are key concerns as the details of this initiative and new apps are developed. Participation is optional, and the initiative does not create any new legally binding requirements for these companies. While the market for digital health care tools could benefit from the emphasis on AI and virtual care, without updated federal privacy and security rules, such as HIPAA, and nondiscrimination requirements, consumers may have to look to state regulation for these protections. Additionally, new, expensive gene therapies and blockbuster medications will likely increase the overall cost of health care and could also challenge policymakers to rethink existing reimbursement structures and government intervention in pricing.

Consumer Choice. Look for policy shifts from consumer assistance and protection to efforts to broaden the health coverage choices available to consumers to include those that may not meet all of the ACA’s consumer protection requirements. The emphasis on “choice” will likely include efforts to encourage consumers to use tax-advantaged accounts such as health savings accounts, which can be used to set aside funds to purchase an increasing variety of items and pay for health care services provided via direct primary care arrangements and telehealth before the deductible applies. Policy debates on whether low-income individuals and those with chronic illnesses are best served by these account-based models are also possible.

• KFF Survey of Consumer Experiences with Health Insurance
• Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors
• What resources are available for privately insured patients who get surprise balance bills?
• No Surprises Act Implementation: What to Expect in 2022
• Examining Prior Authorization in Health Insurance
• Final Prior Authorization Rules Look to Streamline the Process, but Issues Remain
• Mental Health Parity at a Crossroads
• Consumer Appeal Rights in Private Health Coverage
• Price Transparency and Price Variation in U.S. Health Services
• Network Adequacy Standards and Enforcement
• Pre-existing Conditions: What Are They and How Many People Have Them?
• Proposals for Insurance Options That Don’t Comply with ACA Rules: Trade-offs in Cost and Regulation
• Supreme Court Decision Limiting the Authority of Federal Agencies Could Have Far-Reaching Impacts for Health Policy
• 2022 Survey of ACA Marketplace Assister Programs and Brokers
• Rise in Use of Mental Health Apps Raises New Policy Issues
• Navigating the Maze: A Look at Health Insurance Complexities and Consumer Protections
• How Pending Health-Related Lawsuits Could be Impacted by the Incoming Trump Administration
• Charting the Way Forward: New Efforts to Advance Electronic Health Information Sharing

Pestaina, K., Wallace, R., & Long, M., The Regulation of Private Health Insurance. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-the-regulation-of-private-health-insurance/ (date accessed).

Employer-sponsored health insurance (ESI) is the largest source of health coverage for non-elderly U.S. residents. Unlike many other nations, the U.S. relies on voluntary, private health insurance as the primary source of coverage for residents who are not elderly, poor or disabled. Providing health insurance through workplaces is an efficient way of offering coverage options to working families, and the tax benefits of employer-based coverage further enhance its attractiveness. Yet, ESI often results in uneven coverage, especially for those with low wages or those working at smaller firms. Overall, 60% of people under age 65, or about 164.7 million people, had employment-sponsored health insurance in 2023. The level of coverage varies significantly with income and other factors, even among working families.

There are several ways people get private health insurance. One is by purchasing coverage directly from an insurer, often with the help of an insurance agent or through an online platform such as Healthcare.gov. Income-based premium assistance is available under the Affordable Care Act (ACA). This is called individual or non-group health insurance. The second is coverage under a policy or plan offered by a sponsoring group, such as an employer, union or trade association. This is called group health insurance. When an individual is sponsored specifically by an employer (or sometimes jointly by one or more employers and a union or by a group of employers), it is often referred to as employer-sponsored health insurance, or ESI.

The word “insurance” is something of a misnomer here. An employer providing health benefits for workers and their families (“plan enrollees”) can fund them in one of two ways. Employers may purchase a health insurance policy from a state-licensed health insurer, which is referred to as an insured plan. Alternatively, the employer can pay for health care for the plan enrollees directly with its own assets, referred to as a self-funded plan. Employers with self-funded plans often protect themselves from unexpected high claim amounts or volume by purchasing a type of insurance referred to as stop-loss coverage. As discussed below, most ESI plan enrollees are covered by large employers, and most large employers self-fund their health benefit plans.

Another confusing set of phrases used in conjunction with health insurance, including ESI, is “health plan” or just “plan”. The terms can refer to an entity offering coverage (e.g., Aetna) or a particular coverage option offered by an insurer or employer (e.g., the PPO plan option). However, the terms “employee benefit plan” and “plan” have specific meanings in federal law, and invoke several legal obligations for employers when they offer certain benefits to their workers and their family members. Under the Employee Retirement Income Security Act, or ERISA, an employee benefit plan, or plan, is created when a private employer creates a plan, fund or program to provide certain benefits, including health benefits, to employees. ERISA creates a structure of disclosure, enforcement and fair dealing regarding the promises made by employers to enrollees in employee benefit plans. However, ERISA does not apply to the health benefit plans created by public plans or churches, although the word plan is often still used to describe benefits offered in these settings.

ESI plans can be differentiated across several dimensions.

Comprehensive or limited benefits

Employers offer different types of health benefit options to employees. These include comprehensive benefit plans, which cover a large share of the cost of hospital, physician and prescription costs that a family might incur during a year; service-specific benefits, such as dental or vision care plans; and supplemental benefit plans, which may provide a limited additional benefit to enrollees if certain circumstances occur (e.g. $100 per day if hospitalized). The discussion here will be limited to comprehensive benefit plans.

Open or closed provider networks

Health plans contract with hospitals, physicians, pharmacies and other types of health providers to provide plan enrollees with access to medical care at a predetermined cost. Plan enrollees receiving services from one of these providers know that their financial liability is limited by their deductible and other cost sharing amounts specified in their benefit plan. A closed-network plan is one where, absent special circumstances, an enrollee is only covered if they receive care from a provider in their plan’s network of contracted providers. In an open-network plan, an enrollee still has some coverage if they receive care from a provider not in the plan network, although they will likely face higher cost sharing under their benefit plan, and the provider may ask them to pay an additional amount (known as balance billing). Health maintenance organization (HMO) and exclusive provider organization (EPO) plans are two types of closed network plans. Preferred provider organization (PPO) and point of service (POS) plans are two types of open network plans.

Small and large group markets

Federal and state laws divide ESI into the small group and the large group market, based on the number of full-time equivalent employees (FTEs) working for the employer sponsoring the plan. Federal regulation states that employers with fewer than 50 FTEs are often in the small group market and employers with at least 50 FTEs are in the large group market. However, states have the option to raise the small group market limit to fewer than 100 FTEs. The regulatory requirements for the small and large group markets differ somewhat. Generally, the small group insured market is subject to more extensive rules about benefits and ratings. Large employers are potentially subject to financial penalty under the ACA if they do not offer health insurance coverage meeting certain requirements to their full-time employees.

The drafters of the ACA intended to provide coverage options to those without access to employer-sponsored coverage without encouraging employers to drop coverage. To achieve this balance, the ACA requires that employers with at least 50 FTEs offer health benefits which meet minimum standards for value and affordability or pay a penalty. The so-called ‘employer mandate’ constitutes two separate penalties.

First, employers are taxed if they do not offer minimum essential coverage to 95% of their full-time employees and their dependent children. This generally requires that employers offer major-medical coverage and not a limited benefit plan. Employers face this penalty when at least one of their employees receives an advance premium tax credit (APTC) to purchase coverage on the health insurance exchange markets or Marketplaces. In 2024, this penalty stipulates that employers will be assessed a tax of $2,900 for each full-time employee after their first 30 employees.

Secondly, employers are penalized if the coverage they offer is not affordable or does not provide minimum value. Plans are considered to meet the minimum value standard if they cover 60% of the health spending of a typical population. In 2025, coverage was deemed to be affordable if the employee premium contribution is less than or equal to 9.02% of their household income. Employers may be charged $4,350 for each employee enrolling in subsidized Marketplace coverage.

Defining what constitutes ‘affordable’ has been the focus of considerable attention in recent years. The Obama Administration initially issued rules that workers and their dependents would be considered to have an affordable offer if self-only coverage met the affordability test. With many employers requiring much larger premium contributions to enroll dependents, this meant that as many as 5.1 million people were in households where they had to pay a larger share of their income to enroll in the plan offered by their employers without being eligible for premium tax credits. Recent rules have addressed the so-called “family glitch”, by considering the cost of family coverage when assessing affordability. While most large employers offer health benefits, many may encourage spouses and other dependents to enroll in other plans if possible. For more information on eligibility for premium credits see the Affordable Care Act chapter.

ESI is by far the most common source of private health insurance. There are two primary reasons for this. The first is that providing health insurance through the workplace is efficient, with advantages relating both to risk management and to the costs of administration. The second is that contributions towards premiums by employers and (in most cases) by employees are not subject to income or payroll taxes, providing a substantial federal and state subsidy towards the costs of ESI.

ESI Efficiencies

When people have choices about whether to buy insurance and the amount of coverage to buy, it is natural that people with the highest need for coverage (e.g., people in poorer health) will be more likely to purchase and be more willing to pay higher prices. This is called adverse selection. If insurers do not address these tendencies, their risk pools will become dominated by a relatively small share of people with the highest needs, and premiums will increase to levels that only make sense for those with very high expected costs.

There are several ways insurers seek to manage the risk profile of potential enrollees to avoid adverse selection. One is by examining the health profile of each applicant, which typically includes the applicant’s health history and pre-existing conditions. This strategy is reasonably effective, but an expensive and time-consuming process. A much lower-cost approach is to provide coverage to groups of people who are grouped together for reasons other than their health or their need for health insurance. Providing coverage through the workplace is a common way of doing this. Mostly, people choose a job because of the work, not because they need health insurance. Therefore, providing coverage through workplaces provides insurers with a fairly normal mix of healthy and less healthy enrollees if certain conditions are met. These conditions include enrolling a large share of the eligible workers in coverage (typically achieved by the employer paying a large share of the cost) and limiting the range of coverage options (to avoid adverse selection among plan types). Further, as the number of employees grows, the ability to predict future costs based on prior experience also increases, reducing the uncertainty in setting premiums for the group. As uncertainty decreases, insurers can reduce what they charge for insuring the group. Overall, the same scenario generally applies to situations where employers choose to offer a self-funded plan. Therefore, these advantages occur regardless of whether an insurer or an employer is taking on the risk.

In addition to the risk management advantages, ESI has many administrative advantages. Providing coverage through a workplace adds many employees to a risk pool through a single transaction, with no need to examine their health in most cases. Employers also provide and collect enrollment information to workers and collect the employee share of premiums, dramatically reducing the number of transactions and reducing the amount of unpaid premiums that typically occur when individuals purchase insurance directly from insurers.

Tax Advantages

Federal and state tax systems provide significant tax preferences for ESI. Generally, wages and other things of value employers provide as compensation to their workers are subject to federal and state taxes. The federal government taxes wages and other forms of income through a series of marginal rates that vary with income and the marital and filing status of the taxpayer. For example, the lowest marginal rate in 2024 for a single taxpayer was 10% for income below $11,601 and the highest rate was 37% for income above $609,350. Additionally, wages are subject to federal payroll taxes to support the Social Security and Medicare programs; employers and employees are each assessed 6.2% of wages up to a maximum wage for Social Security and 1.45% of wages with no wage limit for Medicare. Wages are also subject to state income and payroll taxes for unemployment which vary considerably.

Unlike wages, ESI provided by employers as part of their compensation to employees is not considered income under the federal income tax code, nor are they considered wages subject to federal payroll taxes (See 26 USC sections 105 and 106). Federal law also permits employers to establish programs that exclude employee contributions towards ESI from these taxes. These exclusions lower the cost of health insurance for employees. For example, just considering the federal tax advantages, if an employee earns annual wages of $100,000, an employer can provide the employee with a $20,000 family policy for an additional $20,000 in compensation. However, if ESI were subject to federal taxes, that same employee would need to earn an additional $27,460 in wages to be able to buy a $20,000 family policy with after-tax dollars, assuming a 22% marginal federal income tax rate and a combined 15.3% payroll tax for Social Security and Medicare. Looked at another way, for this employee, for every dollar that the employer raises the employee’s compensation, the employee can get a dollar of health benefits or just under 63 cents in wages after taxes. State tax laws, which follow federal definitions of income and wages in this situation, further lower the cost of ESI for workers, although the impacts are much smaller.

The exclusion of ESI from federal income tax is a long-standing and somewhat controversial part of federal tax policy, first appearing due to a decision by the War Labor Board in 1942, which in turn allowed employers to use fringe benefits to attract workers during the war. In 1954, ESI exclusion was enacted in the tax code. This tax policy, combined with the risk management and administrative advantages of group coverage, contributed to the rapid growth and continued market dominance of commercial hospital and medical insurance during this period. Detractors of the tax exclusion have argued that it encourages workers to over-consume health insurance by demanding health benefits that are richer than what they would want under a tax-neutral approach (e.g., if health benefits were taxed in the same way as wages). Richer benefits, it is argued, contribute to higher health care costs because people with better insurance use more health care than they otherwise would, since they are not facing the actual costs of care (sometimes called moral hazard). Another criticism is that the income tax exclusion favors higher-paid employees because they have higher marginal tax rates: the effective income tax benefit for a dollar of ESI is only 10 cents for a worker with very low wages, but can be up to 37 cents for those with the highest wages.

In contrast, the exclusion of health benefits from payroll taxes has the same dollar benefit for workers at all wage levels (up to the Social Security earning limit), which results in a higher percentage exclusion (share of wages) for those with lower wages. The tax exclusion was estimated to cost the federal government $312 billion (about $940 per person in the US) in income and payroll taxes in 2022.

As of March 2023, 60.4% of the non-elderly, or about 164.7 million people, had ESI. Of these, 84.2 million had ESI from their own job, 73.8 million were covered as a dependent by someone within their household, and 6.7 million were covered as a dependent by someone outside of their household.

A relatively small share of these people also held other coverage at that time: 3.2% were also covered by Medicaid or other public coverage and 0.6% were also covered by non-group coverage.

ESI coverage varies dramatically with income. In March 2023, more than 4 in 5 (84.2%) non-elderly adults with incomes at least 400% of the federal poverty level (FPL) had ESI, compared to 59.0% with incomes between 200% and 399% of the FPL and 23.9% with incomes below 200% of the FPL.

ESI also varies with age, as well as other worker characteristics. Among non-elderly people in March of 2023, people in younger age groups were less likely than those in older age groups to have ESI, and U.S. citizens were much more likely than non-citizens to have ESI. ESI coverage also varied across race and ethnic categories: compared to non-Hispanic White people, Hispanic people and non-Hispanic people who are Black, American Indian or Alaskan Native, or of mixed race were less likely to have ESI.

For people in working families to have ESI, one or more workers must work for an employer that makes coverage available to them. For workers to access ESI, they need to work for an employer that offers ESI and be eligible to enroll in coverage offered at their job. About four in five (80.8%) adult non-elderly workers worked for an employer that offered ESI to at least some employees as of March 2023. Most (93.1%) of these workers were eligible for the ESI offered at their job. Overall, in 2023, about 3 in 4 of all workers were eligible to enroll in the ESI offered at their job.

Both the share of workers working for employers offering coverage and the share of workers eligible for coverage at their jobs vary significantly by income. Among adult non-elderly workers, the share working for an employer offering ESI ranged from 60.6% for workers with incomes under 200% of the FPL to 88.2% for workers with incomes at least 400% of the FPL. Similarly, the share eligible for coverage ranged from 49.5% for workers with incomes under 200% of the FPL to 84.6% for workers with incomes of at least 400% of the FPL.

Working for an offering employer and being eligible for the offered coverage are dependent on a combination of characteristics. As of March 2023, non-elderly workers working in construction, service, sales, and farm, fishing and forestry-related occupations were less likely to be working for an employer offering ESI and to be eligible for ESI at their jobs. Full-time workers were much more likely to be working for an employer offering ESI and to qualify for coverage at their job. There also was significant variation in offer rates and eligibility within sex, age group, race and ethnicity, and citizenship.

Among non-elderly adult workers eligible for ESI at their jobs in March 2023, 74.4% were ESI policyholders. Of those who did not have ESI from their own job, 14.6% were covered by ESI as a dependent, 4.6% had Medicaid or other public coverage, 2.0% had non-group coverage, 1.1% had some other coverage, and 3.7% were uninsured. A small share of workers with ESI from their job also had other coverage at the same time: 2.4% also had Medicaid or other public coverage and 0.6% also had non-group coverage.

Among firms with three or more workers, just over half (54%) offered health benefits to at least some of their workers in 2024. Firm offer rates differed significantly with firm size. Only 46% of firms with three to nine workers offered health benefits while virtually all (98%) firms with at least 200 employees did so. While a large majority of firms are small, 84% of firms with three or more employees have fewer than 25 employees, and these firms employ just 16% of workers. Sixty-four percent of workers work for firms with 200 or more employees, where the employer offer rate is almost 100%.

Among firms offering health benefits, 25% of firms with fewer than 200 workers and 26% of larger firms offered health benefits to part-time workers in 2024.

Eighty-nine percent of firms offering health benefits offered them to dependents (e.g., spouses and children) of their workers in 2024.

Employer health insurance premiums are the total of what employers and employees pay to providers for health coverage through employment. Generally, premiums are the estimated cost of health spending for the covered population, as well as the administrative costs and fees associated with the plan. Therefore premiums usually increase when a covered population either uses more health services or the prices for health care increase. In 2024, the average total premiums for covered workers were $8,951 for single coverage and $25,572 for family coverage (for a family of four). Employer contributions to an employee’s health insurance premium are a sizeable share of an employee’s overall compensation (6.9% for private industry as of June 2023).

Premiums varied around these averages due to factors such as the age and the health of the workforce, the cost of the providers included in the network, and the generosity of the coverage. In 2024, 16% of covered workers worked at a firm with an average annual premium of at least $31,500 for family coverage. The robustness of plan offerings varies across firms, with some employers offering generous benefits to attract new employees, while others prioritize more affordable plan options. Some employers sponsor limited-benefit plans, which may cover a limited number of services but have lower costs. The average family premium for covered workers at firms with a relatively large share of lower-wage workers (firms where at least 35% of the workers earn $31,000 annually or less) is lower than at firms with fewer lower-wage workers. On the other hand, the average premiums for single and family coverage are relatively higher in the Northeast and in private not-for-profit firms. There is additional discussion of how premiums vary with firm characteristics here.

During the late 1990s and early 2000s, health insurance premiums grew at a rate considerably faster than inflation and workers’ wages. Recently, the rate of growth has moderated. For example, over the last five years, family premiums have grown 24%, roughly comparable to the rate of inflation (23%) and the change in wages (28%). When faced with higher premium costs employers can adjust their plan offerings, increase cost sharing, drop high-cost providers, or change how benefits are covered in other ways.

Workers contribute to health insurance in two ways. First, through a premium contribution, which is typically deducted from an employee’s paycheck. Then, secondly, through cost-sharing such as copays, coinsurance, and/or deductibles, which are paid when the employee utilizes services covered by their plan. While all workers enrolled in the plan must pay their premium (or have it paid by the employer), overall cost sharing is higher for workers who use more services.

Workers with health coverage in 2024, on average, were responsible for 16% of the premium for single coverage and 25% of the premium for family coverage. In dollar terms, the average annual contribution for covered workers was $1,368 for single coverage and $6,296 for family coverage.

Over time, the average premium contribution for covered workers has increased. For example, over the last 10 years, the single coverage average contribution has increased 27% and the family coverage average contribution increased 31%. At the same time, the share of the premium paid by workers has remained relatively consistent. In 2024, covered workers contributed, on average, 16% of the premium for single coverage and 25% of the premium for family coverage, which was similar to these averages a decade ago. This is because as premiums have increased over time, both employers and employees have faced similar increases on average.

There remains a lot of variation in how much workers are required to contribute to their health plan across firms, particularly within firm size. In 2024, 37% of covered workers at small firms were enrolled in a plan where the employer paid the entire premium for single coverage. This was only the case for 5% of covered workers at large firms. However, 26% of covered workers at small firms were in a plan where they must contribute more than half of the premium for family coverage, compared to 6% of covered workers at large firms. The family average contribution rate for covered workers in firms with fewer than 200 employees was 33%, which is higher than the average contribution rate of 23% for covered workers in larger firms. Small firms often approach the cost of health insurance differently than large firms, sometimes making the same employer contribution regardless of whether the employee enrolls any dependents. Similarly, some large employers encourage spouses and dependents to enroll in other plans, if they have access, through spousal surcharges.

In addition to any required premium contributions, most covered workers must pay a share of the cost of the medical services they use. The most common forms of cost-sharing are deductibles (an amount that must be paid before most services are covered by the plan), copayments (fixed dollar amounts), and coinsurance (a percentage of the charge for services). Some plans combine cost sharing forms, such as requiring coinsurance for a service up to a maximum amount or requiring either coinsurance or a copayment for a service, whichever is higher. The type and level of cost sharing may vary with the kind of plan in which the worker is enrolled. Cost sharing may also vary by the type of service, with separate classifications for office visits, hospitalizations, and prescription drugs. Plans often structure their cost sharing to encourage enrollees to reflect on their use, reducing overall utilization.

In recent years, general annual deductibles have grown in prominence in plan design. In 2024, 87% percent of covered workers were enrolled in a health plan that required an enrollee meet a deductible before the plan covered most services. The average deductible amount as of 2024 for workers with single coverage and a general annual deductible was $1,787. On average, covered workers at smaller firms face higher deductibles than those at large firms ($2,434 vs. $1,478). Generally, a substantial share of workers faced relatively high deductibles. Fifty percent of workers at small firms and 26% of workers at large firms had a general annual deductible of $2,000 or more. Over the last five years, the percentage of covered workers with a general annual deductible of $2,000 or more for single coverage has grown from 28% to 32%.

While average deductibles have not grown over the last few years, the growth over the last ten years outpaces the increases in premiums, wages and inflation. The rise in deductible costs has focused attention on consumerism in health care. Some believe that increasing deductibles will place a greater incentive on enrollees to shop for services, therefore reducing total plan spending. Alternatively, deductibles are less common in Health Maintenance Organization (HMO) plans, which use forms of gatekeeping to dissuade utilization. The growth of deductibles has had important consequences for the financial protection that health insurance provides. A multitude of plans require deductibles well in excess of the financial assets of many of their enrollees. As opposed to coinsurances and copays that accumulate throughout the year, deductible spending may require enrollees to finance relatively high expenses all at once.

In addition to looking at the average obligations enrollees face under their health plan, we can look at the actual spending incurred by enrollees in large group plans. In 2021, deductibles accounted for more than 58% of an enrollee’s cost-sharing liability, which is significantly greater than 35% of enrollee liability ten years ago.

The amount of cost sharing large group enrollees face varies, particularly around how many health services a person uses. Individuals who have a hospitalization, or a chronic condition which requires ongoing management, often incur higher cost-sharing over the year. For example, large group enrollees faced an average of $779 in cost sharing, but individuals with a diabetes diagnosis (even without complications) incurred costs of $1,585 in 2017.

While some employer health plans have relatively generous benefits, there remains a concern about affordability, particularly for lower-wage workers who do not have the assets to meet the cost-sharing required under their plan, as well as for individuals enrolling in family coverage at smaller firms. Overall, individuals in families with employer coverage spend 2.4% of their income on the worker contribution required to enroll in an employer-sponsored health plan, and another 1.4% of their income on typical out-of-pocket spending on cost-sharing. Individuals covered by employer-sponsored plans in households at or below 199% of the FPL contribute nearly 10% of their income on average towards their premiums and cost-sharing.

A key component of plan design is the out-of-pocket maximum, which caps the amount of money an enrollee spends on in-network covered benefits within a year.

The ACA requires that almost all plans have an out-of-pocket (OOP) maximum below a federally determined limit. In 2024, 14% of covered workers in plans with an OOP maximum had an OOP maximum of less than $2,000 for single coverage, while 24% of these workers had an OOP maximum above $6,000.

Today virtually all plans have preferential cost sharing for enrollees to visit providers participating in a preferred provider network. Some plans require enrollees to visit a primary care physician or other gatekeeper before they are referred to a specialist. Plans are often categorized based on these characteristics. 

Preferred Provider Organization (PPO)

PPO plans are the most common plan type. These plans typically have broader provider networks and do not require gatekeeping for specialist services. However, insurers may still use utilization management tools, such as prior authorization, to determine appropriate use and which services will be paid for under the plan. Point-of-service (POS) plans have a provider network like a PPO plan but require gatekeeping for referrals. POS plans are more common in the Northeast and among smaller firms. 

Health Maintenance Organization (HMO)

HMO plans represented 13% of covered workers in 2024. HMO enrollment has decreased over the past few decades, compared to nearly 3 in 10 workers who were enrolled in HMOs in the late 1990s. HMOs do not cover non-emergency out-of-network services, and some integrate health care financing and service delivery. Since providers in these plans are not paid on a fee-for-service basis, they are designed to encourage lower utilization to reduce costs.

High Deductible Health Plan with a Savings Option (HDHP-SO)

HDHP-SO is a relatively new plan type. This plan pairs a high deductible with either a Health Reimbursement Arrangement (HRA) or Health Savings Account (HSA). HSA-qualified plans were first authorized in the Medicare Modernization Act of 2003 and grew precipitously until 2015. HDHP-SO plans now represent almost 3 in 10 covered workers, including almost a quarter enrolled in an HSA-qualified plan. These plans may be an HMO, PPO, or POS, meeting specified federal guidelines. HSA-qualified plans allow both employers and enrollees to contribute to a tax-preferred savings account, which enrollees can use to meet their cost-sharing requirements or save for future health spending. On average, HSA-qualified health plans have higher deductibles than other plan types and lower premiums. The growing enrollment in HSA-qualified plans has led to a growth in general annual deductibles overall. While having a higher deductible in other plan types generally increases enrollee out-of-pocket liability, this is not necessarily true for HDHP-SO plans. Many HDHP-SO enrollees receive an account contribution from their employers, reducing the higher cost-sharing in these plans. In 2024, 68% of employers offering single coverage and 77% of employers offering family coverage, as well as an HSA-qualified health plan, contributed to the enrollee’s account. On average, employers contributed $705 to single coverage HSA-qualified HDHPs and $1,297 to family coverage HSA-qualified HDHPs. Some employers may make their account contribution contingent on other factors, such as completing wellness programs. 

Employer plans typically include provider networks, in which enrollees face lower out-of-pocket expenses if they receive care from a designated provider. Firms and health plans structure their networks of providers to ensure access to care to encourage enrollees to use providers who are lower cost or who provide better care. Employees generally prefer broad network plans, and job-based plans are typically broader than those offered on the Marketplaces. Even so, some employers offer a health plan with a relatively small network of providers. These narrow network plans limit the number of providers that can participate to reduce costs and are more restrictive than standard HMO networks. In 2024, 6% percent of firms offering health benefits reported that they offer at least one narrow network plan to their employees.

More frequently, firms use tiered or high-performance networks in which providers are selected and then grouped within the network based on the quality, cost, and/or efficiency of care they deliver. Enrollees then receive lower cost sharing by choosing a provider in a lower tier.

Another way plans designate preferred providers is through “Centers of Excellence”, which are facilities or providers that health plans and employers single out as suppliers of exceptionally high-value specialty care for specific conditions. Plans and employers may encourage or require enrollees to use these designated providers to receive coverage for certain types of care.

As major purchasers of health care, many view employers as having considerable leverage in health care markets based on their network design. This leverage is dampened by a combination of factors, including the prevalence of highly concentrated provider markets, employees’ preferences for broad network plans, and the challenges of building networks capable of delivering timely access.

One specific concern is the availability of mental health providers. In 2023, most firms (91%) reported that they believed their largest plan offered timely access to primary care providers. However, only 67% of firms believed there were enough mental health providers in their largest plan’s network to provide timely access to services. As plan costs continue to rise for employers, these networks may be further limited as high-cost providers are removed to mitigate costs.

In addition to cost-sharing requirements and network design, many employers use other strategies to influence both the health of their workforce and the cost of their health plans.

One such strategy is utilization management, where insurers evaluate enrollees’ health care use. A common tool is prior authorization, where an insurer reviews the appropriateness of certain services or prescriptions before covering them. Plans may use prior authorization to limit the use of services they believe are often used inappropriately or to encourage lower-cost alternatives. In recent years, prior authorization has come under public scrutiny for delaying care and adding complexity for patients. Among large employers (those with 200 or more workers), 12% believe their employees have a high level of concern about the complexity of prior authorization requirements, and another 35% believe employees’ concern is moderate. In early 2025, many insurers pledged to voluntarily expedite their prior authorization processes and improve enrollee communication. How these changes will affect enrollees’ access to timely care remains to be seen, or if ultimately prior authorization becomes the target of new legislation.  While loosening restrictions could improve access, it may also lead to higher plan costs and premiums if more services are used.

Another approach is to promote population health, in order to improve the health and productivity of workers and their family members while also potentially reducing health care spending. Many employers try to achieve this through wellness programs, which may include initiatives such as exercise programs, health education classes, health coaching, and stress management counseling. Among large firms offering health benefits, 69% offer programs to help employees stop smoking or using tobacco, 62% offer programs to support weight loss, and 70% offer other forms of lifestyle or behavioral coaching. Overall, 79% of large firms offer at least one of these programs. Some wellness programs are tied to financial incentives or penalties, which can increase costs for enrollees who choose not to participate in wellness activities, decline health screenings, or, in some cases, fail to meet biometric targets.

While ESI seems likely to remain the dominant source of health insurance for working families, employers and working families each face challenges relating to affordability and access to care. These include: 

Ultimately, health care is expensive, and the cost of good ESI coverage can place a strain on employers and employees, particularly for workers with lower wages. Additionally, only about half of workers with incomes below 200% of the FPL are even eligible for ESI at their workplace. Can ESI be a source of affordable coverage for all working families, or are novel approaches to providing affordable coverage options needed for these families? 

Many ESI policies have significant deductibles and other out-of-pocket costs to keep the premium costs down, while increasing the cost of obtaining care for enrollees. Can and will employers continue to increase out-of-pocket costs, and, if not, how will they control the costs of ESI going forward? 

What avenues are available to employers to increase access to care for people with mental health and substance use care needs? Is telehealth a sufficient response? 

Can employers and health plans develop provider networks that provide quality health care at lower costs? 

• 2024 Employer Health Benefits Survey 
• 2024 Employer Health Benefits Chart Pack 
• Long-Term Trends in Employer-Based Coverage – Peterson-KFF Health System Tracker 
• Long-Term Trends in Employer-Based Coverage 
• Many Workers, Particularly at Small Firms, Face High Premiums to Enroll in Family Coverage, Leaving Many in the ‘Family Glitch’ 
• How many people have enough money to afford private insurance cost sharing? 
• The burden of medical debt in the United States 
• How affordability of employer coverage varies by family income 
• Increases in cost-sharing payments continue to outpace wage growth 
• What do we know about people with high out-of-pocket health spending? 
• Preventive services use among people with private insurance coverage 
• Out-of-pocket spending on insulin among people with private insurance 
• Employer Responsibility Under the Affordable Care Act 

Claxton, G., Rae, M., & Winger, A., Employer-Sponsored Health Insurance 101. In Altman, Drew (Editor), Health Policy 101, (KFF, October, 2025) https://www.kff.org/health-policy-101-employer-sponsored-health-insurance/ (date accessed).

Health coverage in the United States is marked by a blend of private and public insurance options that leaves about 8% of the population uninsured. This coverage system has evolved over the years, most recently with the implementation of the Affordable Care Act (ACA), which aimed to reduce the uninsured rate by expanding Medicaid, creating health insurance Marketplaces for individuals, and providing subsidies to make the coverage more affordable. Many factors, including economic conditions, federal and state policy changes, and significant health crises, such as the COVID-19 pandemic, influence the uninsured rate. The ACA and policy changes designed to protect coverage during the pandemic led to increased health coverage overall; however, passage of the 2025 Federal Budget Reconciliation Bill (referred to as the One Big Beautiful Bill Act) along with other policy changes are expected to increase significantly the number of people who are uninsured over the next ten years.

Health coverage in the U.S. is a complex patchwork of private and public insurance coverage options. In 2023, most residents had private insurance coverage, with nearly half covered by an employer-based plan. About 1 in 5 U.S. residents received coverage through the Medicaid program, the federal and state-financed comprehensive health coverage program for low-income people. Another roughly 15% of the population had health coverage from the federal Medicare program, which covers seniors and people under age 65 with long-term disabilities. About 6% of the population had private non-group insurance either purchased through the ACA Marketplace or off-market, and just over 1% of the population was covered through the military’s TRICARE or VA health care programs. The uninsured rate for the total population was 7.9% for the year (Figure 1). (In some cases, people have multiple forms of coverage. For example, about 12 million people are enrolled in both Medicare and Medicaid and are classified in these figures as covered by Medicaid.)

In 2023, there were 25.3 million uninsured residents ages 0-64, and the uninsured rate among the population ages 0-64 was 9.5%, the lowest rate in U.S. history (Figure 2). The analysis of the uninsured population focuses on coverage among people ages 0-64 since Medicare offers near-universal coverage for seniors—just 457,000, or less than 1%, of people over age 65 were uninsured.

Prior to the implementation of the ACA, gaps in the public insurance system and lack of access to affordable private coverage left over 40 million people without health insurance. The ACA expanded Medicaid coverage to nearly all adults with incomes up to 138% of the federal poverty level (FPL) (the poverty level in the continental U.S. is $15,650 for a single individual in 2025) and created new health insurance Marketplaces through which individuals can purchase coverage with financial help to afford premiums and cost-sharing. Following the passage of the ACA in 2010 and the rollout of the coverage provisions, the number of uninsured people ages 0-64 dropped to 27 million in 2016. The ACA envisioned that all states would adopt the Medicaid expansion; however, a Supreme Court ruling in 2012 made expansion optional for states. As of early 2025, 40 states and Washington, D.C. had adopted the ACA’s Medicaid expansion (Figure 3).

The declines in uninsured rates following implementation of the ACA coverage expansions were largest among poor and near-poor individuals, particularly adults. People of color, who had higher uninsured rates than White people prior to 2014, had larger coverage gains from 2013 to 2016 than White people, although the coverage disparities were not eliminated.

Before implementation of the ACA, expansions of Medicaid coverage and the enactment of the Children’s Health Insurance Program (CHIP) helped to lower the uninsured rate for children. Changes in the 1980s and early 1990s expanded Medicaid eligibility levels for children and pregnant people, and the establishment of CHIP in 1997 provided coverage for children with incomes above Medicaid thresholds. When states implemented CHIP, extensive outreach efforts along with the adoption of streamlined processes facilitated enrollment of children in Medicaid and CHIP and reduced the number of uninsured children.

After declining through 2016, the number of uninsured people and the uninsured rate began increasing in 2017 and continued to grow through 2019. Generally favorable economic conditions as well as policy changes during the Trump Administration, such as reduced funding for outreach and enrollment assistance, encouraging periodic Medicaid eligibility checks, changes to immigration policy related to public charge rules, and approval of some demonstration waivers to restrict enrollment led to a decline in Medicaid enrollment, which likely contributed to the increase in uninsured people.  

With the arrival of the COVID-19 pandemic, policies adopted to protect coverage drove a decline in the uninsured population from 2019 to 2023. The Families First Coronavirus Response Act required states to keep people continuously enrolled in Medicaid in exchange for enhanced federal funding. Medicaid continuous enrollment ended in March 2023, and most states completed renewals for individuals who enrolled during continuous enrollment by December 2024. In addition, the American Rescue Plan Act (ARPA) provided temporary enhanced ACA Marketplace subsidies to make Marketplace coverage more affordable, and these subsidies were renewed for another three years in the Inflation Reduction Act of 2022. These enhanced subsidies will expire at the end of December 2025 unless Congress acts to extend them.

Most people who are uninsured are adults under age 65, are in working low-income families, are people of color, and, reflecting geographic variation in income, immigration status, and the availability of public coverage, live in the South or West. In 2023, over 8 in 10 people ages 0-64 who were uninsured were adults and 16% were children.

Nearly three-quarters (73.7%) of the uninsured population ages 0-64 had at least one full-time worker in their family and an additional 11.2% had a part-time worker in their family (Figure 4). More than 8 in 10 (80.9%) people ages 0-64 who were uninsured were in families with incomes below 400% FPL in 2023 and nearly half (46.7%) had incomes below 200% FPL. People of color comprised 62.9% of the uninsured population ages 0-64 in 2023 despite making up about 46% of residents ages 0-64. Most uninsured individuals (74.2%) were U.S. citizens, while 25.8% were noncitizens in 2023. Nearly three-quarters lived in the South and West.

Adults ages 19 to 64 are more likely to be uninsured than children. The uninsured rate among children (5.3%) was less than half the rate among adults ages 19-64 (11.1%) in 2023, largely due to the broader availability of Medicaid and CHIP coverage for children than for adults. Among adults ages 19-64, men had higher uninsured rates than women in 2023 (12.6% vs. 9.5%).

Reflecting persistent disparities in coverage, people of color are generally more likely to be uninsured than White people. In 2023, American Indian and Alaskan Native (AIAN) and Hispanic people ages 0-64 had the highest uninsured rates at 18.7% and 17.9%, respectively, which were nearly three times higher than the uninsured rate for White people (6.5%). Uninsured rates for Native Hawaiian or Pacific Islander (NHPI) (12.8%) and Black people (9.7%) ages 0-64 were also higher than the rate for their White counterparts (Figure 5). These differences in uninsured rates are driven by lower rates of private coverage among these groups. Medicaid coverage helps to narrow these differences but does not fully offset them.

Noncitizens are more likely than citizens to be uninsured. Nearly one-third of noncitizen immigrants were uninsured in 2023 while the uninsured rate for U.S.-born citizens was 7.5% and 8.9% for naturalized citizens. One in 4 children has an immigrant parent, including over 1 in 10 (12%) who are citizen children with at least one noncitizen parent.

Uninsured rates vary by state and by region and were generally higher in states that had not taken up the ACA Medicaid expansion in 2023 (Figure 6). Economic conditions, availability of employer-sponsored coverage, and demographics are other factors contributing to variation in uninsured rates across states.

The fragmented U.S. health coverage system leads to gaps in coverage. While employer-based insurance is the prevalent source of coverage for the population ages 0-64, not all workers are offered coverage by their employer or, if offered, can afford their share of the premiums. Medicaid covers many low-income individuals, especially children, but eligibility for adults remains limited in most states that have not adopted the ACA Medicaid expansion. While subsidies for Marketplace coverage are available for many low and moderate-income people, few people can afford to purchase private coverage without financial assistance.

The cost of health coverage and care poses a challenge for the country broadly and is a significant barrier to coverage for people who are uninsured. In 2023, 63.2% of uninsured adults ages 18-64 said they were uninsured because coverage is not affordable, making it the most common reason cited for being uninsured (Figure 7). Other reasons included not being eligible for coverage (27.0%), not needing or wanting coverage (26.6%), and signing up being too difficult (23.9%).

Not all workers have access to coverage through their jobs. In 2023, 64.7% of uninsured workers worked for an employer that did not offer them health benefits. Among uninsured workers who are offered coverage by their employers, cost is often a barrier to taking up the offer. Low-income families with employer-based coverage spend a significantly higher share of their income toward premiums and out-of-pocket medical expenses compared to those with income above 200% FPL.

A decade after the implementation of the ACA coverage options, 10 states have not adopted the Medicaid expansion, leaving 1.4 million uninsured people without an affordable coverage option. A coverage gap exists in states that have not adopted the expansion for poor adults who earn too much to qualify for Medicaid coverage but not enough to be eligible for subsidies in the Marketplace.

Lawfully-present immigrants generally must meet a five-year waiting period after receiving qualified immigration status before they can qualify for Medicaid. States have the option to cover eligible children and pregnant people without a waiting period, and as of January 2025, 38 states have elected the option for children, and 32 states have taken up the option for lawfully-present pregnant individuals. Under current law, lawfully-present immigrants are eligible for Marketplace tax credits, including those who are not eligible for Medicaid because they have not met the five-year waiting period. Undocumented immigrants are ineligible for federally-funded coverage, including Medicaid and Marketplace coverage, although some states provide fully state-funded health coverage to these individuals.

Health care provisions in the 2025 reconciliation package narrow eligibility for federally-subsidized health coverage, including Medicaid and CHIP, Medicare, and Marketplace subsidies, to a limited group of lawfully-present immigrants. These changes take effect on January 1, 2027 and are expected to increase the number of lawfully residing immigrants without health coverage.

Though financial assistance is available to many of the remaining uninsured under the ACA, not everyone who is uninsured is eligible for free or subsidized coverage. Nearly 6 in 10 (14.5 million) uninsured individuals in 2023 were eligible for financial assistance through Medicaid or subsidized Marketplace coverage (Figure 8). However, over 4 in 10 uninsured (10.9 million) were outside the reach of the ACA because their state did not expand Medicaid, their immigration status made them ineligible, or they were deemed to have access to an affordable Marketplace plan or offer of employer coverage (Figure 8).

Lacking health insurance in the United States can impact a person’s access to health care, their financial situation, and their health status. It can also broadly impact a community’s public health (illustrated by the COVID-19 pandemic) and the economy through lower productivity.

Adults who are uninsured are almost five times more likely than adults with insurance to report not having a usual source of care, which is often a key entry point for accessing health care whether for preventive services or for treating existing conditions. Consequently, in 2023, nearly half (46.6%) of uninsured adults ages 18-64 reported not seeing a doctor or health care professional in the past 12 months compared to 15.6% with private insurance and 14.2% with public coverage (Figure 9). Uninsured individuals are also more likely to face cost barriers to accessing needed care. In 2023, uninsured adults were nearly three times more likely to report not getting medical care due to cost compared to publicly insured adults and four times more likely than privately insured adults (22.6% vs 7.7% and 5.1%, respectively).

The lack of access to health care and a delay in seeking care due to costs mean uninsured people are more likely to be hospitalized for avoidable health problems and to experience declines in their overall health. Research also shows that when they are hospitalized, uninsured people receive fewer diagnostic and therapeutic services and have higher mortality rates than those with insurance.

Uninsured individuals often face unaffordable medical bills when they do seek care, which can lead to medical debt and other forms of financial instability. Nearly half of uninsured adults reported difficulty paying for health care, compared to 21% of insured adults and over 8 in 10 (84%) uninsured adults said they worried that health care costs would put them in debt or increase their existing debt, compared to 71% of adults with insurance (Figure 10). Uninsured adults are also more likely to face negative consequences due to health care debt, such as using up savings, having difficulty paying other living expenses, or borrowing money.

Driven by pandemic-era policies to promote health coverage, the number of people without insurance and the uninsured rate dropped to historic lows in recent years. Although millions of people lost Medicaid coverage during the unwinding of continuous enrollment, Medicaid enrollment remains higher than in February 2020, before the start of the pandemic. Enhanced Marketplace subsidies adopted during the pandemic led to record Marketplace signups, with enrollment topping 25 million in 2025. States have also taken action to reduce the number of people who are uninsured. In 2023, two states, North Carolina and South Dakota, newly adopted the Medicaid expansion, and several states have expanded state-funded coverage for certain individuals regardless of immigration status.

However, actions by Congress and the Trump Administration threaten to reverse these recent coverage gains. Congress passed the 2025 Federal Budget Reconciliation package on July 3, 2025, which makes significant changes to Medicaid and ACA Marketplaces, and President Trump signed the reconciliation package into law on July 4, 2025.  The Congressional Budget Office (CBO) estimates that the law will increase the number of people without health insurance by 10 million. The expiration of the enhanced premium tax credits for Marketplace enrollees, which will happen at the end of 2025 unless Congress takes action to extend them, will further increase the number of people without health insurance. CBO projects that over 14 million more people will be uninsured in 2034 due to the combined effects of the reconciliation package and the expiration of the enhanced Marketplace subsidies. In addition to these potential coverage losses, the Trump administration’s increased immigration enforcement activities are likely to have a broad chilling effect that could cause immigrants to decide to disenroll or not enroll themselves or their children, most of whom are U.S. citizens, in health coverage programs even if they are eligible due to immigration-related fears.

Enactment of the ACA helped close some gaps in our fragmented health coverage system and led to a significant decline in the number of people who were uninsured. Recent efforts built on that success to further shrink the share of people without insurance. Yet, despite this success and the ACA’s continued favorability—the public has a favorable view of the ACA by a 2 to 1 margin—policymakers enacted cuts to federal support for Medicaid and ACA coverage to fund other budget priorities. The impact on health coverage and people’s ability to access needed health care services will be significant.

• Key Facts about the Uninsured Population 
• How Many Uninsured Are in the Coverage Gap and How Many Could be Eligible if All States Adopted the Medicaid Expansion?
• A Closer Look at the Remaining Uninsured Population Eligible for Medicaid and CHIP
• Health Coverage by Race and Ethnicity, 2010-2023
• Key Facts on Health Coverage of Immigrants
• How Does Cost Affect Access to Health Care?
• State-Funded Health Coverage for Immigrants
• How Will the One Big Beautiful Bill Act Affect the ACA, Medicaid, and the Uninsured Rate?

Tolbert, Jennifer, Bell, Clea, Cervantes, Sammy & Singh, Rakesh, The Uninsured Population and Health Coverage. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-the-uninsured-population-and-health-coverage/ (date accessed).

Health systems aim to provide accessible, high-quality care that improves health outcomes at an affordable cost. One way to assess the performance of the United States’ health system is to benchmark it against those in similar countries.

Comparing health system performance internationally is complicated, though, as each country has unique political, economic, and social conditions. Because health spending and health outcomes are often correlated with a country’s wealth, this chapter focuses on comparisons between the U.S. and other large and wealthy OECD nations: Australia, Austria, Belgium, Canada, France, Germany, Japan, the Netherlands, Sweden, Switzerland, and the United Kingdom.

Despite spending far more money than any peer nation, Americans live shorter lives and often face more barriers to care. Some of this disparity can be attributed to aspects of the U.S. health system, but socioeconomic, health and other factors also play a role.

From the late nineteenth to mid-twentieth centuries, many nations created health insurance systems that aimed to make health care accessible and affordable to their population. Some countries, like the United Kingdom, have health systems that are largely publicly funded and operated, while other countries, like Switzerland, have a compulsory private insurance system. Many countries’ health systems include a mix of private and public insurance. Regardless of financing mechanism, the health systems in many countries that are similarly large and wealthy as the U.S. are largely compulsory, resulting in universal or near-universal health coverage.

During this same period, the United States took a different approach, relying on a largely voluntary private insurance system that resulted in a substantial share of the population being uninsured. Despite decades of calls for a national public health insurance program, it was not until 1965 that two major public insurance programs were created – Medicare for people age 65 or older and Medicaid for low-income people – and it was not until the Affordable Care Act passed in 2010 that the U.S. health system was expanded to create near-universal eligibility for health insurance coverage for lawfully present residents. Even so, the U.S. health system is still largely voluntary and millions of people in the U.S. continue to go without insurance, often citing cost as a barrier.

Wealthy countries, including the U.S., tend to spend more per person on health care and related expenses than lower-income countries. However, even among higher-income countries, the U.S. spends far more per person on health.

Spending Growth

Over the past five decades, the health spending gap between the U.S. and peer nations has widened. In 1970, the U.S. spent about 7% of its GDP on health, which was similar to spending in several comparable countries (the average of comparably wealthy countries was about 5% of GDP in 1970). The U.S. was relatively on pace with other countries until the 1980s, when health spending in the U.S. grew at a significantly faster rate relative to its GDP. 

The United States spends more per capita on total health expenditures, including government spending and household payments. In 2020, the U.S. spent 19.5% of its GDP on health consumption (up from 17.5% in 2019), largely due to the increased spending during the COVID-19 pandemic, along with the economic downturn. By 2023, health spending as a share of GDP had declined to 17.6% in the U.S.—but remains substantially higher than in peer countries.

Drivers of Health Spending

The largest category of health spending in both the U.S. and comparable countries is spending on inpatient and outpatient care, which includes payments to hospitals, clinics, and physicians for services and fees such as primary care or specialist visits, surgical care, provider-administered medications, and facility fees. Americans spent $8,353 per person on inpatient and outpatient care, compared to $3,636 in peer countries, on average. The U.S.’s higher spending on providers is driven more by higher prices than higher utilization of care. Patients in the U.S. have shorter average hospital stays and fewer physician visits per capita, while many hospital procedures have been shown to have higher prices in the U.S. Higher spending on inpatient and outpatient care drives most of the difference in health spending between the U.S. and its peers. In fact, the U.S. spends more on inpatient and outpatient care than most peer nations spend on their entire health systems (including long-term care, prescription drugs, administration, prevention, and other services).

The cost of prescription drugs is another factor that partially explains the U.S.’s higher health spending. Many of the same medications cost more in the U.S. than they do in other comparable nations. In 2022, the U.S. spent $1,765 per capita on prescription drugs and other medical goods (including over-the-counter and clinically delivered pharmaceuticals as well as durable and non-durable medical equipment). However, because prescription drugs represent a relatively small share of total health spending, even if per capita prescription drug spending in the U.S. were closer to that of comparable countries, that would make only a small dent in closing the gap on health spending.

Spending on health administration is similarly much higher in the U.S. than in comparable countries: $1,078.44 per capita. Administrative costs include spending on running governmental health programs and overhead from insurers, but exclude administrative expenditures from health care providers. This includes administrative spending for private health insurance, governmental health programs (such as Medicaid and Medicare), as well as other third-party payers and programs.

The U.S. also spends more per capita on preventive care than peer nations. Activities captured in this spending category vary among countries, but in the U.S., it generally consists of public health activities, including preventive health programs and education for immunizations, disease detection, emergency preparedness, and more. In the U.S., preventive care spending more than doubled between 2019 and 2020, from $343 to $741 per capita, but subsequently declined to $649 by 2022.

Meanwhile, the only category of spending in which the U.S. spends less than most comparable countries on a per-person basis is long-term care. Long-term care spending includes health and social services provided in long-term care institutions such as nursing homes as well as home- and community-based settings. After an increase from 2019 to 2020 at the onset of the COVID-19 pandemic, U.S. spending on long-term care declined by 4.9% between 2020 and 2021 but increased again by 5.4% between 2021 and 2022. Long-term care spending was already lower in the U.S. than in peer countries before the pandemic.

Life Expectancy

Life expectancy is one of the most common measures of health outcomes. In 1980, the average American could expect to live 73.7 years – a similar life expectancy to residents of most wealthy countries. However, in subsequent years, life expectancy continued growing in most other nations at a pace far beyond that of the U.S.

In 1996, Japan became the first nation to report an average life expectancy of 80 years among its population. By 2012, all peer countries had also achieved this milestone. That same year, life expectancy in the U.S. was 78.5 years and began a decade-long plateau. By 2019, the life of the average U.S. resident would be almost four years shorter than the life of the average resident of these comparable nations (78.8 vs. 82.7 years).

This plateau and four-year gap were already highly concerning, but the health crisis brought on by the COVID-19 pandemic made the situation in the U.S. much worse. For the first time ever recorded, life expectancy dropped by almost two years, from 78.8 in 2019 to 77.0 in 2020. The pandemic was not unique to the United States, but this stunning life expectancy drop was – the average comparable nation saw a decline of less than half a year (82.7 to 82.3). By 2023, life expectancy rebounded to 78.4 years, still a full 1.3 years below pre-pandemic levels and over four years below the average among peer nations.

The life expectancy data presented here are period life expectancy estimates based on excess mortality observed in each year. Period life expectancy at birth represents the mortality experience of a hypothetical cohort if current conditions persisted into the future, and not the mortality experience of a birth cohort.

Years of Life Lost

The causes of this decrease in life expectancy are multifaceted. When people die before a certain age, the difference between their age at death and the specified age is recorded as life years lost. For example, when looking at years of life lost before age 75, a person who dies at age 60 would be considered to have lost 15 years of life. Examining the causes of these years of life lost can point to the factors which are decreasing life expectancy.

The United States had the highest rate of years of life lost per 100,000 population aged 75 years old in 2021, by a large margin. However, by examining the cause of these years of life lost, it is possible to notice where the U.S. underperforms. For example, the U.S. has a significantly higher rate of years of life lost due to heart disease, transport accidents, and accidental poisoning (a category that includes drug overdose).

While cancer is a common cause of premature years of life lost in the United States, most other countries have a similar rate of years of life lost due to cancer. This indicates that cancer is not a main cause of the discrepancy between the U.S. and peer nations.

Overall, the United States’ higher rates of premature death and disease burden do not necessarily reflect entirely on the quality of care that patients receive in doctors’ offices or hospitals. Life expectancy, mortality rates, and disease burden can also be influenced by factors outside of the health system, like socioeconomic conditions (e.g., income inequality, structural racism) and differences in health-related behaviors (e.g., diet, exercise, drug use). Children and teens in the U.S. are less likely to make it to adulthood than in peer countries, with the U.S having higher rates of motor vehicle accidents, firearm deaths, and suicide deaths among children and teens.

Another, more direct way to measure the performance of the health system is to examine the quality of care provided in a hospital or clinical setting. However, inconsistent and imperfect quality metrics make it difficult to compare quality of care in the U.S. and its peers.

In comparison to peer nations, across the limited measures available internationally, the U.S. performs better on some and worse on other indicators of quality of care. For example, the U.S. performs worse on certain measures of treatment outcomes (such as maternal mortality) and some patient safety measures (such as obstetric trauma with instrument and medication or treatment errors). The U.S. performs similarly to or better than peer nations in other measures of treatment outcomes (such as mortality rates within 30 days of acute hospital treatment) and patient safety (such as rates of post–operative sepsis).

Hospital Mortality Rates

Mortality within 30 days of being admitted to a hospital is not entirely preventable, but high quality of care can reduce the mortality rate for certain diagnoses. The 30-day mortality rates after hospital admissions for heart attacks (acute myocardial infarction) are similar in the U.S. and the average of comparable countries. However, the 30-day mortality rates for ischemic strokes (caused by blood clots) were 4.5 deaths per 100 patients in the U.S. in 2022, compared to an average of 6.9 deaths per 100 patients in similar countries. Rates of mortality after hemorrhagic stroke (caused by bleeding) are also lower in the U.S. While the U.S. has lower rates of mortality due to these conditions than the average across peer nations, it is important to note that several peer nations have lower rates than the U.S.

Maternal Health

While wealth and economic prosperity are highly correlated with lower maternal mortality rates, the U.S. is an outlier with the highest rate of pregnancy-related deaths (18.6 deaths per 100,000 live births in 2023) when compared to similar countries (5.1 deaths per 100,000 live births). 

Within the U.S., there are significant racial disparities in maternal mortality rates. The maternal mortality rate for Black mothers is about 3 times the rate for White mothers — a disparity that persists across age and socioeconomic groups. Every race and ethnicity, socioeconomic, and age group in the United States sees higher maternal mortality rates than the average in comparable countries. Maternal mortality in the U.S. has risen in recent years, sparking concern from the medical community and policymakers. 

Obstetric trauma is more likely to occur in deliveries where instruments are utilized (i.e., forceps). The rate of obstetric trauma during deliveries with an instrument in the U.S. was 11.7 per 100 vaginal deliveries in 2022, higher than most comparable countries with available data. The rate of obstetric trauma during deliveries without an instrument in the U.S. was 1.7 per 100 vaginal deliveries in 2022, on the lower end among comparable countries with available data.

Hospital Admissions

Hospital admissions for certain chronic diseases, such as cardiac conditions, chronic obstructive pulmonary diseases (COPD), asthma, and diabetes, can arise for a variety of reasons, but preventive services — or lack thereof — play a large role. Hospital admission rates in the U.S. are higher than in comparable countries for congestive heart failure and complications due to diabetes, and some admissions for these chronic conditions could be avoided through primary care.

Post-Operative Complications

Rates of post-operative complications are an important measure of hospital safety. Pulmonary embolisms and deep vein thromboses are common complications after major surgeries, such as hip or knee replacement. The prevalence of post-operative clots for these procedures is higher in the U.S. than in the U.K., Sweden, Belgium, and the Netherlands, but lower than in Australia.

Sepsis is a life-threatening complication of infection that can lead to organ failure, shock, or death. Rates of post-operative infections and sepsis are an important marker of care quality for patients undergoing surgery, because this is a major source of morbidity and mortality that can sometimes be prevented. Prevention is multifactorial and can involve proper operative techniques and training, hygiene and safety protocols, and antibiotic utilization, among other things. The rate of post-operative sepsis following abdominal surgery is just under 2% in the U.S., lower than in most peer countries that report data.

Out-of-Pocket Costs

Universal coverage means all residents have health insurance, but it does not mean health care is free. In many countries people contribute to health care costs through both out-of-pocket expenses—such as copays, coinsurance, and deductibles—as well as insurance premiums. Even in countries with universal coverage, residents often have at least nominal out-of-pocket costs. In fact, people in Switzerland pay more out-of-pocket on health care ($1,988), on average, than Americans do ($1,425) per capita.

Costs are a common barrier to accessing health care in the U.S. More than 1 in 4 Americans report skipping consultations, tests, treatment, or follow-up, and 21% report skipping medication. Only 9.2% of the United States population is uninsured, so these numbers include individuals who have health insurance, but still find medical care unaffordable. While cost-related access barriers are particularly prevalent in the U.S., residents of other countries with universal coverage also report skipping care due to costs.

Appointment Availability

Cost is not the only reason why a person may miss or delay needed medical care. The availability of physicians can also impact access to care. Among people who needed same or next-day medical care, about half (51%) of Americans were able to make a timely appointment, which is somewhat below the average of peer nations (57%).

Physicians

The U.S. has just 2.7 practicing physicians per 1,000 residents, compared to an average of 3.8 among peer nations. Also of concern in the U.S. is the ratio of primary to specialty care providers. Most other nations have somewhere between one-quarter and one-half physicians employed in primary care. Primary care is an integral part of the health system in many nations – a patient sees a primary care physician for most illnesses or injuries and only goes to a specialist or hospital if their primary care doctor decides it is necessary. In the United States, however, only 12% of doctors are general physicians, including primary care physicians.

The U.S. faces this physician shortage and high rates of specialization in part due to how medical education is structured. The U.S. has kept a tight lid on the number of medical schools, as well as the number of training spots available to new doctors. Furthermore, the higher education system in the U.S. places the burden of financing an education on the student, and university tuition is more expensive than in many peer countries. As a result, students borrow money, and most graduate from medical school with a significant amount of debt. Because primary care generally comes with a lower salary, some new physicians may pursue a higher-paid specialty, even if they would rather work in primary care.

Additionally, the U.S. has only 0.15 psychiatrists per 1,000 residents, the lowest of all peer nations. Although the U.S. has a high number of specialist providers, only 6% are psychiatrists, compared to an average of 10% of specialists in other countries examined. Despite clear and increasing demand for mental health treatment, psychiatry remains one of the lowest-paid physician specialties in the United States.

The outlook of health systems will be shaped by various factors, including political and policy changes, technological advancements, economic and demographic shifts, social factors, and unforeseen events–as the COVID-19 pandemic demonstrated. Here are some issues to watch:

Health Outcomes: The United States was already performing worse than its peers across a wide range of health outcomes, but the COVID pandemic widened the gap, and it is not yet clear whether life expectancy and other measures will recover as quickly in the U.S. as in peer nations. In addition to the pandemic recovery, both the U.S. and peer countries face the challenge of aging populations and increases in chronic conditions, leading to increased demand for health care services and long-term care.

Access to Care: Unlike the U.S., other large and wealthy nations have long achieved universal or near-universal health coverage and offer more robust access to care. While the U.S. recently reached a record-high insurance coverage rate, the tax and spending legislation signed by President Trump includes the biggest reduction ever in federal spending on Medicaid and the Affordable Care Act Marketplaces—changes that are projected to increase the number of people uninsured by millions in the coming years. Moreover, even those with insurance in the U.S. often face high out-of-pocket costs, leading many to forgo needed care or incur medical debt.

Quality of Care: The adoption of new technologies will shape care delivery in both the United States and in other countries. Electronic health records, telemedicine, artificial intelligence, and other digital health tools are becoming more prevalent globally. However, many digital health tools are new, untested, and have unknown implications for quality of care.

Health Spending: Most peer nations place a strong emphasis on cost containment and efficiency and achieve this through regulation of and negotiation with health providers. In the U.S., by contrast, the federal and state governments less directly control commercial health insurance prices. However, with the passage of the Inflation Reduction Act, Medicare has negotiated drug prices for a selection of high cost drugs. There will likely be ongoing debate about further actions the federal government can take to lower drug prices, as well as taking other steps to restrain prices of health care generally.

Health Costs:

• How does health spending in the U.S. compare to other countries? – Peterson-KFF Health System Tracker
• How do healthcare prices and use in the U.S. compare to other countries? – Peterson-KFF Health System Tracker
• What drives health spending in the U.S. compared to other countries – Peterson-KFF Health System Tracker
• How do prices of drugs for weight loss in the U.S. compare to peer nations’ prices? – Peterson-KFF Health System Tracker
• How do prescription drug costs in the United States compare to other countries? – Peterson-KFF Health System Tracker

Health Outcomes:

• How does U.S. life expectancy compare to other countries? – Peterson-KFF Health System Tracker

• Premature mortality during COVID-19 in the U.S. and peer countries – Peterson-KFF Health System Tracker
• What do we know about social determinants of health in the U.S. and comparable countries? – Peterson-KFF Health System Tracker

Access and Quality of Care

• How does the quality of the U.S. health system compare to other countries? – Peterson-KFF Health System Tracker
• How do U.S. healthcare resources compare to other countries? – Peterson-KFF Health System Tracker
• Percent of adults who made a same-day or next day appointment when needed care

Wager, E. & Cox, C., International Comparison of Health Systems. In Altman, Drew (Editor), Health Policy 101, (KFF, October 2025) https://www.kff.org/health-policy-101-international-comparison-of-health-systems/ (date accessed).