U.S. Taxpayers Spend Nearly Twice As Much as Canada on Healthcare (per Capita)
Sometimes simple narratives don’t quite match reality. But other times, they’re not even close.
Here’s one:
Canada provides universal public healthcare while the U.S. has a private system that serves only those who can afford insurance.
As it turns out, there are nearly as many errors in that sentence as there are words. For one thing, when you account for the millions of citizens who have no access to primary care providers, Canada’s system isn’t exactly “universal”. And characterizing healthcare in the U.S. as “private” would require inflicting some serious violence on the word.
A recent conversation with a subscriber of The Audit inspired me to run some numbers to properly compare public healthcare spending in both the U.S. and Canada. By “public”, of course, I mean services purchased by governments on some level. In other words, I’m not trying to compare the quality of health services or how long patients have to line up for help. Instead, I’m just curious to know how much taxpayer money is being spent.
Spoiler alert: in 2025, American taxpayers will have spent around $9,195 USD per person on healthcare, while the bill for Canadians will have been around $6,950 CAD per person - or $5,000 USD. I’ll say that again: Canada’s publicly funded system pays just more than half of what the American “private” system coughs up.
Now I’m aware that this comparison is hardly apples-to-apples. Healthcare economies being as complex as they are, I’m sure we could find storage trunks full of “yes but…” distinctions. And many of those are indeed valid - especially arguments seeking to quantify “value for spending”. But right now, I’m only interested in the political implications of the generosity differential.
Canadian Public Spending
Let’s look at some details. According to the Canadian Institute for Health Information, Canadian governments at all levels will spend $283 billion on healthcare - which will represent around 71 percent of total healthcare spending ($399 billion).
Of course, that’s not the whole story. Remember: a lot of that spending involves deficits that come with carrying charges. So I think it’s reasonable to include 2025 debt servicing expenses from previous borrowing - or at least an estimated portion of those charges that relate to previous healthcare spending.
I understand that public debt isn’t really measured this way. But interest payments are nevertheless very real, and they are the result of spending choices. Had the two billion dollars spent on the CBC in 2025 been, instead, directed to health transfer payments, there would be that much less interest to pay in 2026.
So when I notionally add seven billion dollars worth of interest charges (which assumes a 12 percent portion of our $55.6 billion in public debt charges), our estimated total climbs to $290 billion (CAD).
U.S. Public Spending
According to Centers for Medicare & Medicaid Services (CMS) National Health Expenditure (NHE) Projections, the total cost of governments programs that include Medicare, Medicaid, CHIP, and Veterans Health Administration will come to around $2.8 trillion for 2025.
Affordable Care Act (ACA) marketplace subsidies will add another $130 billion to that. And we can top that up with another $270 billion as a notional portion of the U.S. debt servicing commitments.
That gives us a total estimated annual spending of $3.2 trillion (USD).
Per Capita Spending
The rest is straightforward. I just need to divide those totals by the population numbers for each country and I’ll come out with the total estimated per capita spending. That, as I wrote above, will show us that U.S. governments spend $9,195 (USD) on each American, while Canadian taxpayers contribute around $5,000 (USD).
So to say that Americans don’t receive public medical care is crazy. And to say that all Canadians receive their care for free is - when you consider how a typical family of four earning $150,000 will pay $11,000 in healthcare-targeted taxes annually - equally nutty. And to say that no one, on either side of the border, is getting perfect service is obvious.
The conversation we should be having is about what changes we could implement to make things better.
Here’s some more depressing reading on this topic:
Are We Winning the Patient-to-Doctor Ratio War?
The fact that millions of Canadians lack primary healthcare providers is a big deal. The grand promise of universal healthcare rings hollow for families forced to spend six hours waiting in a hospital emergency room for a simple ear infection diagnosis.
Do National Healthcare Funding Systems Make a Difference?
It’s always fun to see how Canada’s healthcare system ranks against the rest of the world. But it could also be useful, because such comparisons might just point to what we can change to make things better here at home. So when I recently came across some rankings on the
The gap is wide, but our domestic costs are shifting gears. Actually, CIHI data shows health spending hit $9,054 per person in 2024, or 12.4% of our GDP. This matches the highest ratio in our history, excluding the pandemic.
While we spend less than the Americans, our growth is now outpacing the economy. This is driven by an aging population and high utilization of hospital and physician services, which account for over half of our total spending. It is less about a bargain and more about managing a system under mounting pressure.
So can we envision what our HC would look like if per capita government spending in Canada was doubled to match the amount of government spending the US places into a "private" system?
I know it's a complicated apples to oranges to cars to cows system that makes comparison difficult BUT as the US system is the most frequently used alternative in discussion, and we're spending half of what they are perhaps more funding is needed?