In fiscal year 2024, the federal government allocated $1.9 trillion to health care programs and services, representing 27% of total federal expenditures and marking it as the largest category of federal spending. Additionally, tax subsidies for employer-sponsored insurance and Affordable Care Act (ACA) premium tax credits resulted in $398 billion in forgone tax revenues.
A significant portion of this federal support—over 80%—is dedicated to programs that provide or subsidize health insurance coverage. Medicare accounts for 36% of this spending, Medicaid and the Children’s Health Insurance Program (CHIP) comprise 25%, employer-based health coverage represents 17%, and ACA coverage subsidies make up 5%.
Discretionary spending constitutes a smaller segment of federal health support. In FY 2024, more than half (52% or $128 billion) of discretionary health spending was allocated to hospital and medical care for veterans. Other allocations included funding for agencies such as the National Institutes of Health (19% of discretionary health spending) and the Centers for Disease Control and Prevention (4%), as well as global health initiatives (4%).
Overall, more than one in every four federal dollars was spent on health programs and services in FY 2024. This underscores the federal government’s substantial role in financing health care in the United States.
Source: KFF Issue Brief