7% to investment, and 6% to other professional services (physical therapists, optometrists, etc.). hospitalization costs according to a report from the agency for healthcare research and quality (ahrq), aggregate u.s. hospital costs in 2011 were $387.3 billion—a 63% increase since 1997 (inflation adjusted). costs per stay increased 47% since 1997, averaging $10,000 in 2011. insurance markets u.s. health insurance coverage by source in 2016. cbo estimated aca/obamacare was responsible for 23 million persons covered via exchanges and medicaid expansion. employee market an estimated 178 million persons under 65 obtain their insurance through their employer. firms are often "self-insured", meaning they reimburse the insurance companies that pay the medical claims on behalf of their employees. employers may use a stop-loss, meaning they pay the insurance company a premium to cover very expensive individual claims (e.g., the firm is self-insured up to a threshold for individual workers). workers pay a share of their costs to their employers for coverage, basically a premium deducted from their paychecks. workers also have deductibles and out-of-pocket costs. the structure of the insurance plan may also include a health savings account or hsa, which enable workers to save money tax-free for health expenses. the kaiser family foundation reported that employer-based health insurance premiums for a family of four averaged $18,765 in 2017, up 3% from the prior year, although there was considerable variation around this average. for single coverage, the premium costs averaged $6,690, up 4% from the previous year. the typical worker contributed $5,714 on average towards their coverage, with the employer providing the remainder. deductibles have been rising much faster than premiums in recent years. for example, deductibles rose 12% in 2016, four times faster than premiums. from 2011 to 2016, deductibles rose 63% for single coverage, versus 19% for single coverage premiums. during that time, worker earnings rose 11%. the average annual deductible is around $1,500. for employers with fewer than 200 employees, 65% of employees are now in "high-deductible plans" which averaged $2,000. one consequence of employer-based coverage (as opposed to single-payer or government-funded via individual taxes) is that employers facing increasing healthcare costs offset the expense by either paying relatively less or hiring fewer workers. since health insurance benefits paid by employers are not treated as income to employees, the government foregoes a sizable amount of tax revenue each year. this subsidy or tax expenditure was estimated by cbo at $281 billion in 2017. on march 1, 2010, billionaire investor warren buffett said that the high costs paid by u.s. companies for their employees' health care put them at a competitive disadvantage. he compared the roughly 17% of gdp spent by the u.s. on health care with the 9% of gdp spent by much of the rest of the world, noted that the u.s. has fewer doctors and nurses per person, and said, "hat kind of a cost, compared with the rest of the world, is like a tapeworm eating at our economic body." aca marketplaces further information: affordable care act an estimated 12 million persons obtained their insurance from insurance companies in 2016 via online marketplaces (federal or state) developed as part of the affordable care act, also known as "obamacare." this insurance is federally subsidized through a premium tax credit, which varies based on the level of income of the individual. the credit is typically applied by the insurance company to lower the monthly premium payment. the post-subsidy premium cost is capped as a percentage of income, meaning as premiums rise the subsidies rise. approximately 10 million persons on the exchanges are eligible for subsidies. an estimated 80% of persons obtaining coverage under the aca can get it for less than $75 per month after subsidies, if they choose the lowest-cost "bronze" plan. the average cost for the "second-lowest cost silver plan" (the benchmark plan and one of the most popular) was $208/month after subsidy for a 40-year-old male non-smoker in 2017. president trump's decision in november 2017 to end the cost sharing reductions subsidy, a second type of subsidy used to reduce deductibles and co-payments, was expected to increase premiums dramatically, thereby increasing the premium tax credits as well to maintain after-subsidy costs to participants at the same percentage of income. in other words, the after-subsidy cost would not rise for those with premium tax credit subsidies. those obtaining their insurance via the exchanges without subsidies would pay up to 20 percentage points more for insurance. cbo also estimated a $200 billion increase in the budget deficit over a decade due to trump's decision. the cbo estimated that ending or not enforcing the individual mandate (which requires those without health insurance to pay a penalty) would increase the uninsured by 13 million by 2027, reducing the budget deficit by $338 billion over 10 years as subsidies fall. cbo also estimated that ending the mandate would encourage healthier people to drop out of the marketplaces, thus raising premiums by up to 10%. medicaid further information: medicaid medicaid is a joint federal and state program that helps with medical costs for about 74 million people (as of 2017) with limited income and resources. medicaid also offers benefits not normally covered by medicare, like nursing home care and personal care services. medicaid is the largest source of funding for medical and health-related services for people with low income in the united states, providing free health insurance to low-income and disabled people. it is a means-tested program that is jointly funded by the state and federal governments and managed by the states, with each state currently having broad leeway to determine who is eligible for its implementation of the program. states are not required to participate in the program, although all have since 1982. medicaid recipients must be u.s. citizens or legal permanent residents, and may include low-income adults, their children, and people with certain disabilities. poverty alone does not necessarily qualify someone for medicaid. the federal medical assistance percentage (fmap), the percent of medicaid program costs covered by the federal government, ranges from 50% for higher-income states to 75% for states with lower per-capita incomes. the affordable care act ("obamacare") significantly expanded both eligibility for and federal funding of medicaid starting in 2014, with an additional 11 million covered by 2016. under the law as written, all u.s. citizens and legal residents with income up to 133% of the poverty line, including adults without dependent children, would qualify for coverage in any state that participated in the medicaid program. however, the united states supreme court ruled in national federation of independent business v. sebelius that states do not have to agree to this expansion to continue to receive previously established levels of medicaid funding, and 19 republican-controlled states have chosen to continue with pre-aca funding levels and eligibility standards. expanding medicaid in these 19 states would expand coverage for up to four million people. the cbo reported in october 2017 that the federal government spent $375 billion on medicaid in fiscal year 2017, an increase of $7 billion or 2% over 2016. the increase was primarily driven by more persons covered due to the aca. medicare further information: medicare (united states) medicare covered 57 million people mainly aged 65 and over as of september 2016. enrollees pay little in premiums but have deductibles for hospital stays. the program is funded partially by the fica payroll tax and partially by the general fund (other tax revenues). the cbo reported in october 2017 that adjusted for timing differences, medicare spending rose by $22 billion (4%) in fiscal year 2017 to $595 billion, reflecting growth in both the number of beneficiaries and in the average benefit payment. medicare average spending per-enrollee was $10,986 in 2014 across the u.s., with states ranging from $8,238 in montana to $12,614 in new jersey. military health care the department of defense and veterans health administration both operate health systems and insurance systems for military personnel, their families, and retirees and their dependents. defense health agency the defense health agency is a joint, integrated combat support agency founded in 2013 that enables the u.s. army, u.s. navy, and u.s. air force medical services to provide a medically ready force and ready medical force to combatant commands in both peacetime and wartime. the department of defense's unified medical program represents $49.5 billion or 8% of total fy2020 u.s. military spending. tricare further information: tricare tricare (styled tricare) is a health care program of the department of defense military health system. tricare provides civilian health benefits for u.s armed forces military personnel, military retirees, and their dependents, including some members of the reserve component. tricare is the civilian care component of the military health system, although historically it also included health care delivered in military medical treatment facilities. the department of defense operates a health care delivery system served approximately 9.6 million beneficiaries in 2020. with the exception of active duty service members (who are assigned to the tricare prime option and pay no out-of-pocket costs for tricare coverage), military health system beneficiaries may have a choice of tricare plan options depending upon their status (e.g., active duty family member, retiree, reservist, child under age 26 ineligible for family coverage, medicare-eligible, etc.) and geographic location. veterans health administration further information: veterans health administration the veterans health administration is the component of the united states department of veterans affairs that implements the healthcare program of the va through the administration and operation of numerous va medical centers (vamc), outpatient clinics (opc), community based outpatient clinics (cboc), and va community living centers (va nursing home) programs to serve tens of millions of military veterans. it employs over 300,000 personal and has a budget of $65 billion usd (2015) reasons for higher costs the reasons for higher u.s. healthcare costs relative to other countries and over time are debated by experts. relative to other countries bar chart comparing healthcare costs as percentage of gdp across oecd countries there are many reasons why u.s. healthcare costs are higher than other oecd countries: administrative costs. about 25% of u.s. healthcare costs relate to administrative costs (e.g., billing and payment, as opposed to direct provision of services, supplies and medicine) versus 10-15% in other countries. for example, duke university hospital had 900 hospital beds but 1,300 billing clerks during 2013. assuming $3.2 trillion is spent on healthcare per year, a 10% savings would be $320 billion per year and a 15% savings would be nearly $500 billion per year. for scale, cutting administrative costs to peer country levels would represent roughly one-third to half the gap. a 2009 study from price waterhouse coopers estimated $210 billion in savings from unnecessary billing and administrative costs, a figure that would be considerably higher in 2015 dollars. cost variation across hospital regions. harvard economist david cutler reported in 2013 that roughly 33% of healthcare spending, or about $1 trillion per year, is not associated with improved outcomes. medicare reimbursements per enrollee vary significantly across the country. in 2012, average medicare reimbursements per enrollee ranged from an adjusted (for health status, income, and ethnicity) $6,724 in the lowest spending region to $13,596 in the highest. the u.s. spends more than other countries for the same things. drugs are more expensive, doctors are paid more, and suppliers charge more for medical equipment than other countries. journalist todd hixon reported on a study that u.s. spending on physicians per person is about five times higher than peer countries, $1,600 versus $310, as much as 37% of the gap with other countries. this was driven by a greater use of specialist doctors, who charge 3-6 times more in the u.s. than in peer countries. the oecd reported that in 2013 the u.s. spent $1,026 per capita on pharmaceuticals (drugs) versus an oecd average of around $515. the cost of an mri in canada is approximately $300, versus $1,000 in the u.s. higher level of per-capita income, which is correlated with higher healthcare spending in the u.s. and other countries. hixon reported a study by princeton professor uwe reinhardt that concluded about $1,200 per person (in 2008 dollars) or about a third of the gap with peer countries in healthcare spending was due to higher levels of per-capita income. higher income per-capita is correlated with using more units of healthcare. americans receive more medical