Does the federal government spend half its revenue on health care?

The California Healthcare Foundation claims that the federal government spent half its revenue on health care in 2010. Is it true? Well, no.

The report says that in 2010, the federal government spent $742.7 billion on health care and that 34% (or $252.1 billion) of this was Medicare. Already I am skeptical of this number because I know from reading Trustees and CBO reports that Medicare spending is about $500 billion.

The report also says that when it counts government revenue, it excludes payments for social insurance. I guess that excludes payroll tax receipts for Social Security and Medicare. But that’s a lot of revenue, some of which is earmarked for health care.

Turning to a different source, usgovernmentrevenue.com, which compiles data from official government sources, I find that total federal health care spending in 2010 was $846.8 billion (Medicare at $457.8 billion) and revenue was $2,162.7 billion. Dividing, I find that the federal government spent 39% of its revenue on health care.

Just in case it isn’t clear, government revenue excludes debt. Either way you slice it, we’re financing a lot of what the government does with debt, and a huge amount is going to health care. Still, I find the claim that half of 2010 federal government revenue was spent on health care dubious. The facts are frightening enough. No need to cook the books* to make them seem more so.

* Perhaps there are good arguments for why CHF’s spending numbers seem too low and for excluding social insurance tax revenue from revenue, but I don’t know what those could be.

@afrakt

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