In 2021, health care spending in the United States increased 2.7 percent to $4.3 trillion, or an average of $12,914 per person.
In 2020, some consumers saw a bit of savings when health insurers waived deductibles on COVID-19 treatments.
But in the pandemic aftermath, more Americans footing more of the bill for their care. This can be expensive, especially when you consider the average cost of a hospital stay in the U.S.
Health Care in the United States is Expensive
Rest assured that whether it’s you who is being admitted after a scare that was followed by umpteen tests or your daughter-in-law staying in a private room after having a C-section, health care in the United States is expensive.
READ MORE: How Much Does It Cost to Have a Baby?
The numbers indeed are staggering as the total health care spending in the United States soared past $4.3 trillion in 2021, according to totals from the Centers for Medicare & Medicaid Services. And more than 31% of that — or about $1.3 trillion — was spent at hospitals.
Additionally, hospital costs averaged $2,873 per day throughout the United States. (That’s 504 hours of work at the average 2021 hourly earnings.) If you reside California, the most expensive state for health care, the bill will top $3,726 per day. You’ll also pay higher-than-average costs if you live in New York. On the flip side, the least expensive state for health care is Wyoming, averaging $1,383 per day.
Average Hospital Stay Cost for Inpatient Treatment
Yes, health-care costs are high on their own, but costs soar when treatment includes an overnight stay, which averages about $13,600.
These numbers and other healthcare-related costs can be financially devastating for anyone, especially if you’re on a limited budget or don’t have healthc insurance.
About 60% to 65% of all bankruptcies are related to medical expenses, because when a patient sees the final invoice, the bill is overwhelming.
In 2021, the United States reportedly spent about $4.3 trillion, or 18.3% of the GDP, on health expenditures, and that number continues to rise.
Average Emergency Room Costs
If you thought an emergency room visit was cheaper than full-on hospital visits, you’d be surprised.
An average ER visit in the United States costs $2,200 on average, according to UnitedHealthcare, but the total cost will depend on your condition and where you live.
It could be even more if you need to be admitted for a longer stay.
These ER costs have skyrocketed by 176% percent in the last decade, according to USA Today.
Keep this in mind: if you are admitted to an ER for whatever ailment, your total charge will be based on triage fees ($200-$1,000), facility fees (averages $1,118), doctor fees — not included in facility fees — and supplies.
In triage, there are 5 severity levels; each with a different charge. Level 1 is the most urgent, and Level 5 is the least urgent. If you’re level 3, 4 or 5, you’ll have a long wait. A level 3 (most common) will pay significantly more than a level 5.
The bottom line is before you race to an emergency room in your neighborhood, city, or town, do assess your condition to make sure it’s an actual emergency.
If it isn’t a true emergency — say you fell and think you broke your arm or sprained an ankle — this and other smaller issues can be treated at an urgent care center for a fraction of the cost.
You could save yourself a lot of money, time, and effort by going to an urgent care center. Many are equipped to manage everything from suturing a deep cut to setting a broken arm. Not only will the wait time be shorter, but it will also be cheaper.
University of Chicago Medicine offers some helpful guidelines on what constitutes an emergency:
Head to the ER or call 911 if you experience:
- Shortness of breath;
- Chest pain, left arm pain or left jaw pain;
- Serious burns and cuts;
- Severe allergic reaction;
- Stroke symptoms, including slurred speech or sudden numbness/weakness in any area of your body, facial droop, loss of balance or vision;
- A change in mental status (such as confusion);
- Loss of consciousness (if you pass out);
- Multiple injuries or a possible broken bone in areas like the ribs, skull, face, or pelvis; or
- If you’re pregnant and have vaginal bleeding or pelvic/abdominal pain.
For less severe symptoms, visit an urgent care center or, if permitted in your state, try a virtual consultation with a doctor, also known as telemedicine.
Doctor Visit Costs
Before going to the hospital, ER, or an urgent care center, you should assess whether you actually just need to see the doctor.
You should also know what type of insurance you have, what it covers and who the network providers are before visiting any health care facility (unless it’s an emergency.)
Even when you go to a doctor for a routine visit and if you have private insurance, you’ll probably have to pay a co-pay ranging from $20 to $25 for a primary care visit to $30 to $50 on average to see a specialist.
However, if you have a High-Deductible Health Plan or HDHP, you’ll pay the full price until your deductible obligations are met.
Doctor Visit Costs Without Insurance
A doctor’s visit will set you back somewhere between $70 and $250 if you’re uninsured, but this number rises if you need additional testing or prescriptions.
Healthcare BlueBook is an online guide to health care pricing, with amounts based on the typical fees physicians nationwide accept as payment from insurance companies if you want to check it out.
According to the Healthcare BlueBook pricing, an office visit for a new patient with a minor problem will cost between $90 to $283. An office visit for an established patient with complex problems ranges from $222 to $695+.
Baffled by premiums, deductibles and out-of-pocket maximums? Consumer Reports has a good overview that will help clear things up and give you a better sense of how your money is spent.
Average Cost for COVID-19 Hospitalization
During the coronavirus pandemic, the average cost for COVID-19 hospitalization could be cripplingly expensive. The median charge amount for hospitalization ranged from $34,662 for patients ages 23 to 30, to $45,683 for those between 51 to 60, according to FAIR Health.
Various insurers waived deductibles for COVID-19 cases, and preventive vaccines remain free to the general public, but that was just a small part of the overall tab.
Pro tip: If you need a COVID-19 booster, ask if you will be responsible for any payment. Government response to the pandemic is beginning to wane and protections are being lifted.
Typical Surgery Costs
Also, be forewarned when you go to the hospital for a procedure, you might be surprised to learn how expensive it is.
For example, if you think buying a new car or putting down a down payment on a home is cheaper, guess again.
Here are some examples of typical procedure costs, based on the national average, depending on where and when you might have these practices:
- Hysterectomy: $4,271 for a vaginal hysterectomy to $8,413 for a vaginal or abdominal hysterectomy.
- Gallbladder surgery: For patients without health insurance, gallbladder surgery typically costs $10,000-$20,000.
- Appendectomy: For patients not covered by health insurance, an appendectomy typically costs about $10,000-$35,000 or more, depending on the provider, whether the operation is open or laparoscopic, and whether there are complications.
- ICD implantation: If you’ve never heard of an ICD, be thankful: it stands for Implantable Cardioverter-Defibrillator. It’s a small electronic device similar to a pacemaker that sends an electrical shock to the heart that essentially “reboots” it to get it pumping again. Total costs for an ICD implantation range from $24,078 to $57,347 with an average of $36,098.
- Heart bypass surgery: Depending on how complicated the procedure needs to be, costs average $75,345 in the United States.
- Hip replacement: Surgery can cost you anywhere between $23,203 to $74,000+, according to Healthcare BlueBook.
- Knee replacement: The average cost of an inpatient knee replacement procedure was $30,249, compared with $19,002 as an outpatient, according to estimates from Blue Cross Blue Shield.
- Weight loss surgery: The average cost of gastric bypass surgery is $23,000, the average cost of a lap band procedure is $14,500, and the average cost of sleeve gastrectomy surgery is $14,900.
Bear in mind that there are other costs associated with surgery, including pre- and post-surgical treatment, anesthesia (you don’t want to skimp there!), consultations with the surgeon and various deductibles, co-pays and premiums.
What If You Can’t Afford your Medical Bills?
So, what happens if you have a heart attack, a stroke, or some other major illness and can’t afford your medical bills?
If you find yourself in this spot you are not alone, according to the Federal Reserve, the credit scores of two in five Americans were negatively affected by medical bills. One in six credit reports contains a medical debt.
There are a few things you can do if this happens to you or someone in your family:
1. Review all bills. Are the charges accurate? It’s not uncommon for a hospital to make errors on invoices. Be sure to check with the finance department that everything is accurate, and you have looked at the invoice with a fine-tooth comb.
2. Don’t ignore any medical bills. If you do, you could find yourself in the collection file, and that’s the last thing you want, especially if you must have future procedures or make a return to a hospital or medical facility.
3. Try to negotiate with the hospital to work out an interest-free payment plan. Like any other business, a hospital is a business, and you might be able to work out a payment plan with the finance department when you explain to them about your financial hardship(s). Community hospitals are more likely to negotiate.
4. See if there are any nonprofit organizations in your community that help with medical expenses.
5. Apply for a loan (don’t use credit cards to pay your medical bills unless you have no other option.) Ask a family member, friend, or someone you feel comfortable approaching if they can loan you the money so you can pay off your medical bills.
6. Work with any debt collection agencies that contact you, explain the situation with them, and see if you can work out an arrangement. Depending on the debt collection agency, some will consider your health problems and issues and may be more lenient with a payment plan.
7. Consider bankruptcy: This will have long-term consequences, so this should be a last-ditch option. But if you need to claim bankruptcy, you need to claim bankruptcy, it’s nothing to be ashamed of and it happens to good people.
READ MORE: How to Get Help with Medical Bills
Annual Health Care Costs in the United States
Like everything else, from cheese to a bottle of wine, items go up and rarely go down, and health care is no different.
Incidentally, the United States spends the most on health care, and in 2021, National Health Expenditures grew 2.7% to $4.3 trillion, or 18.3% of the gross domestic product (GDP). Spending per person was $12,914.
And the largest shares of total health spending were funded by:
- The federal government: 34%
- Households: 27%
- Private business: 17%
- State and local governments: 17%
- Other private revenues: 7%
For comparison, Switzerland, the country with the second-highest spending, spent about $9,666 in health care expenses per capita.
Other Health Care Costs
Besides a potential future ER or long-term hospital visit, there are other health care costs you should think about that can also add up. From the prescription meds you might need to take to long-term care if you need to move to a nursing home or assisted living facility or if you need someone to help you, the associated health care costs in this country are high:
- Prescription drug spending totaled $603 billion in 2021, an increase of 7.7% over 2020.
- Out-of-pocket spending grew 5.8% to $1.2 billion in 2021.
- Physician and clinical services expenditures grew 5.6% to $$864 billion in 2021.
Why is Health Care in the United States So Expensive?
There are several reasons:
- Utilization: According to USA Today, utilization is often the underlying motive to make money and results in a ripple effect pushing prices up. For example, insurance companies spend a big amount on utilization reviews — a process that determines if a medical service is covered under a certain health care plan. The goal is “to not pay consumers for the care they thought they were insured for …”
- Price: The United States health care is part of a system where patients are charged for the services they receive which means prices for everything related can fluctuate enormously, and they do.
- Hospital consolidations: It’s no secret that the United States health care system is fractured within the country and there are fewer choices for companies who offer health insurance or medical care to choose from.
- Inefficiencies: For those companies that offer or charge for health care, i.e., hospital systems and drug manufacturers, they have the power to keep costs high as they negotiate with various potential payers such as private insurance companies.
And when dealing with a single-payer, i.e., the federal government, there’s even more pressure to meet the demand to sell their services. The USA Today article states: “The United States government doesn’t regulate what most companies in the health care space can charge for their services, whether it’s insurance, drugs, or care itself.”
Do Higher Costs Lead to Better Outcomes?
No, the United States performs worse than other countries in common health issues such as life expectancy, infant mortality, and uncontrolled diabetes.
In other words, just because you’re paying more for a doctor visit, or for an ER doctor to set your broken leg, or to stay three days in a private room after you have given birth doesn’t mean the care will be A+.
There are many health care options available from employer-provided insurance to the Affordable Care Act (also known as Obamacare.)
In general, the majority of Americans are enrolled in a private health insurance plan, according to the United States Census Bureau. Others get their coverage via a public or government program such as Medicaid or Medicare.
Employer-based coverage continues to be the most common, followed by 19% of Americans with Medicaid and 17% with Medicare, the report states.
Here’s the breakdown and brief description of each:
- Private health insurance: Private health insurance means health insurance plans marketed by the private health insurance industry, rather than a government-run insurance program. Private insurance currently covers a little more than half of the United States population and spending for it grew 3.7% to $1,195.1 billion in 2019.
- Employer-sponsored health insurance: Usually a health policy chosen and bought by your employer. It is offered to eligible employees and their dependents. Sometimes referred to as group plans. An employer may split the cost of premiums with you and chooses the plan options.
- High-deductible plan: This is an insurance policy with a higher deductible than a traditional insurance plan. The monthly premium is lower, but you pay more health care costs on your own before the insurance company begins paying its share (your deductible). An HDHP can be combined with a health savings account or HSA. Under the tax law, HDHPs must set a minimum deductible and a limit, or maximum, on out-of-pocket costs. allowing you to pay for certain medical expenses with money free from federal taxes. An HSA is tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a high-deductible health plan. The funds contributed to an account are not subject to federal income tax at the time of deposit.
- COBRA: The Consolidated Omnibus Budget Reconciliation Act helps employees and their families who lost their health benefits the option to continue group health benefits provided by their group health plan but for a limited time under certain circumstances like voluntary or involuntary job loss, reduction in hours worked, a transition between jobs, death, divorce, and other life events. Not cheap, those qualified may need to pay the entire premium for coverage up to 102% of the cost of the plan.
- Medicaid: Medicaid offers health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, seniors, and those with disabilities. Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government. Current stats report that Medicaid covers 75.4 million people, according to an enrollment report in April. Also, Medicaid spending grew 2.9% to $613.5 billion in 2019.
- CHIP: If your children need health coverage, they may be eligible for the Children’s Health Insurance Program also known as CHIP. CHIP offers low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women. Each state offers CHIP coverage and works alongside its state Medicaid program.
- Telemedicine: Because of COVID-19 telemedicine has become more popular and more sought out by those who cannot or don’t want to go to the hospital, urgent care center, or can’t see their doctor in a physical office. Telemedicine sometimes interchanged with Telehealth is the “distribution of health-related services and information via electronic information and telecommunication technologies.” It allows long-distance patient and clinician contact, care, advice, reminders, education, intervention, monitoring, and remote admissions.
If you currently don’t have an employer-sponsored plan or private health insurance, you have a few other options.
Medicare is a national health insurance program for those 65 and older and that began in 1965 under the Social Security Administration and is now administered by the Centers for Medicare and Medicaid Services. Medicare spending grew 6.7% to $799.4 billion in 2019. From 2009 to 2017, the average cost of an inpatient hospital stay for Medicare patients increased by 11%, to about $11,700, according to the Agency for Healthcare Research and Quality.
Medicare Plan B
Some people automatically get Medicare Part B (Medical Insurance), while others must sign up for Part B. Learn how and when you can sign up for Part B.
If you don’t sign up for Part B when first eligible, you might have to pay a late enrollment penalty.
Part B Premiums
Part B Premiums are paid each month and are automatically deducted from your benefit payment if you get benefits from one of these:
- Social Security
- Railroad Retirement Board
- Office of Personnel Management
If you don’t get these benefit payments, you’ll get an invoice to pay them. Most people will pay the standard premium amount. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your IRS tax return from 2 years ago. This is the most recent tax return information provided to Social Security by the IRS, according to this website.
Medicare doughnut hole: This is no treat. Most Medicare drug plans have a coverage gap known as the “doughnut hole.” This means there’s a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the coverage gap. The coverage gap starts after you and your drug plan have spent a certain amount on covered drugs. Once you and your plan have spent $4,130 on covered drugs in 2021, you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get extra help paying Part D costs won’t enter the coverage gap.
Affordable Care Act Plans
The Affordable Care Act or ACA or Obamacare is a comprehensive reform law, enacted in March 2010. It increases health insurance coverage for the uninsured and implements reforms to the health insurance market. This includes many provisions that are consistent with American Medical Association policy and holds the potential for a better health care system. Typically, when you enroll in a health insurance plan, there’s a monthly premium to be paid to keep the plan. Obamacare includes subsidies to help lower-income individuals cover the cost of their plans.
It makes affordable health insurance available to more people. The law provides consumers with subsidies (“premium tax credits”) that lower costs for households with incomes between 100% and 400% of the federal poverty level. (Side note: If your income is above 400% FPL, you may still qualify for the premium tax credit in 2021, the website reports).
- The federal government offers incentives for people that vary due to income level.
- The plans provide options for coverage if you’re self-employed or work for a small company.
- Choosing a plan can be confusing and complicated.
- Deductibles can be very high.
- Your coverage options are dependent on where you live. Some states or areas have very limited options.
Gap insurance is a temporary short-term plan bought to cover gaps when there is a job change or if there’s a layoff.
- It can be significantly cheaper than COBRA
- It provides a safety net in case of catastrophe,
- It’s still relatively expensive — one recent plan offered a limited plan with a $5,000 deductible for about $300 a month.
- Fewer health care facilities will accept it.
- It doesn’t include prescription coverage.
A medical gap plan pays the amount applied to the insured’s major medical deductible and coinsurance. It covers the same expenses as the major medical plan except for charges for professional fees in a doctor’s office or medical clinic, outpatient prescription drugs, vision, dental, and plan copayments.
For employers, especially those who want to keep or improve the benefits they offer, a gap plan can save them 10-20% on their group medical premium. With a gap plan, a business can offer gap health insurance that keeps out-of-pocket expenses for employees down while spending less than they would if they had a higher-priced plan with a lower deductible.
For example, if the major medical deductible is $1,000 and the gap plan deductible is $500, then the employee will pay only $500 in out-of-pocket costs.
The Bottom Line
Overall, health care in the United States continues to be costly regardless of if you have the best of the best private insurance or are on a government plan — without all the bells and whistles.
And unfortunately, health care costs don’t appear to be going down any time soon and will continue to rise and become more costly for everyone.
It’s important to make sure you know what kind of insurance you do have, and what money you have saved up in case of a medical emergency if/when it happens.
Hospitals won’t usually report medical debt to the credit bureaus. But if you don’t pay what you owe, they will turn the debt over to collections. Once the account shows up in collections, it will damage your credit score. The longer the debt is in collections, the worse the impact on your credit will be. There is one big benefit to paying those past-due medical bills. The credit bureaus have said they will update credit reports to remove all debts that were paid after being sent to collections. This has the potential to give your credit score a significant boost.
No, technically hospitals cannot look at any patient’s bank account without permission. The fine print, however, may request this permission, or it may request copies of your recent bank statements. If possible, make sure you — or a family member — carefully review all documents before agreeing to sign.
Sometimes, they will. In the case of charity-based care, a hospital may decide to write off an unpaid medical bill. Usually, though, if a patient doesn’t pay their bill, it will become bad debt and be turned over to a debt collector. If the bill becomes bad debt, the patient will be liable for it and it could impact their credit.