The $8.6 Trillion Public-Private Partnership That Fails Us All

New government projections show U.S. health spending will eat more of our GDP while life expectancy and coverage rates decline — but AHIP and Wall Street keep cashing in.

By 2033, we Americans will be spending an astonishing $8.6 trillion on health care, up from $5.6 trillion this year and more than twice the $4.1 trillion we spent in 2020, according to the a new report from the federal government. 

You would think that that kind of spending would make us the healthiest people on the planet, but not only are we not, we are losing ground to many other countries that spend far less on health care. That’s because huge and growing chunks of the vast amounts of money we as patients and taxpayers are forced to cough up are used to maintain a massive administrative bureaucracy designed to keep us from getting the care we need. The only people doing really well are the rich executives and shareholders of the corporate conglomerates that built and run that bureaucracy.

And as the aggregate total grows unabated, the amount we spend on health care as a percentage of GDP continues to grow and will exceed 20% – up from 18% percent in 2024 – eight years from now. To those who say, “So what? That’s our choice,” it’s important to understand that every additional dollar we devote to health care as a percentage of GDP is a dollar that is not available to us for other necessary goods and services, like food, clothing and housing. 

Another way of looking at this is that the amount we will spend for every man, woman and child in the U.S. will jump from $13,617 in 2022 to $24,200 in 2033. It’s little wonder that more and more American families are getting buried in medical debt and unable to afford a mortgage or even put food on the table. 

The alarming projections in health care spending, which got scant attention in the media, were made last week by the Center for Medicare and Medicaid Services in its annual National Health Expenditures report. CMS also noted in its report that the percentage of people with health insurance will fall in the coming years, dropping from 92.1% this year to 91.3% in 2033. The decline could very well be much steeper if Congress enacts the One Big Beautiful Bill the Senate is voting on today. As many as 16 million or more of us could be pushed into the ranks of the uninsured if the deep cuts to Medicaid and other federal programs in the bill are enacted. 

The Price of America’s Public-Private Sham

It’s important to note that other developed countries that spend far less than we do have achieved universal coverage and consistently report better health outcomes than the U.S. This is good news because it means that there is more than enough money in our health care system to provide universal comprehensive care and have money left over. But first we would need to address the reasons for our high health spending. The fundamental reason, in my view, is the so-called “public-private partnership” between the government and private corporations, insurance corporations in particular, that is treasured by many politicians in the U.S.

Politicians of both parties often speak of this presumed partnership in glowing terms, mimicking industry spin, especially after they’ve received generous campaign donations from executives and political action committees of for-profit insurers, which are in business first and foremost to make money for themselves and their shareholders. In truth, it is more of a shakedown than a partnership.

It will perhaps come as no surprise that the leading cheerleader of public-private partnerships in health care is none other than AHIP, the big Washington-based PR and lobbying group for health insurers.  AHIP’s propaganda, which I once helped create and disseminate, makes this “partnership” sound as American as mom and apple pie. Who would even dare to question its supposed value?

But let’s be clear, what we are really talking about here is an enormous transfer of tax dollars paid by hard-working Americans to some of the most inefficient, unfair and despised corporations in American history, under the pretense that those companies are efficient, fair and doing a good job. Insurers’ often impenetrable bureaucracy — impenetrable by design — results in administrative costs that consume an estimated 30% of the trillions we spend on health care and that ensures that millions of us go to our graves early because corporate bureaucrats deny coverage for care we need.

No other country allows insurance companies to call the shots like we do, which explains how the rest of the developed world does so much better than we do and with far less money and far less administrative red tape.

A Uniquely-American Problem

As Don Berwick, who led CMS during the Obama administration, pointed out last week in an commentary for the Center for American Progress:

There is no disputing that America’s health care system needs a dramatic overhaul. U.S. life expectancy ranks 49th globally at more than four years lower than that of the world’s healthiest countries. Our children’s health ranks 36th among the 38 richest nations. Not a single U.S. state has an average life expectancy longer than that of comparably wealthy nations. If the goal is to make America as healthy as other wealthy nations, it would be hard to do worse than we are doing right now. And for that terrible performance, the United States spends twice as much per capita on health care as the average wealthy country — with more than 110 million Americans struggling with medical debt.

One example of the consequences of this uniquely American public-private partnership in health care is the documented overpayments to private insurers in the Medicare Advantage program. The Medicare Payment Advisory Commission (MedPAC), the nonpartisan independent agency that advises Congress on Medicare issues, says CMS will overpay insurers by $84 billion this year alone – and that the overpayments will exceed $1 trillion over the next 10 years unless Congress and the executive branch take action to stop them. Other estimates of the overpayments are even higher.

You would think Robert F. Kennedy Jr., President Trump’s secretary of Health and Human Services, would be aware not only of the rampant fraud, waste and abuse in Medicare Advantage but also of the criminal investigation the Trump administration’s Department of Justice reportedly has launched into UnitedHealthcare, the biggest MA company by far. And you’d hope that ending this enormous waste of tax dollars would be a top priority. 

So I was dismayed last week to learn that Kennedy, whose department encompasses CMS (which, remember, is the agency that issued the report on accelerating health care spending), was not aware of either. In an exchange with Rep. Alexandria Ocasio-Cortez (D-NY) during a hearing of the House Energy & Commerce Committee on Tuesday, he said he didn’t know about the overpayments or the United investigation – or that CMS, which he oversees, announced in April that it would give already overpaid MA companies a 5% raise next year.

Watch (or read) Kennedy’s responses to Rep. Ocasio-Cortez’s questions below and you’ll have a better understanding of why we pay so much for health care in this country and get so little in return – unless, of course, you’re a shareholder of a big insurance company and benefit from the ruse that corporate spin doctors and their paid lap dogs call a partnership. 

AOC: Something that we've both spoken to is that some of the worst actors are in the for-profit medical space – are in for-profit, health insurance, Big Pharma, et cetera. And one of the worst companies, actually, is UnitedHealthcare, in this respect. UnitedHealthcare is the largest health insurance company in the country. They are the largest employer of doctors, and own 1000s of pharmacies, clinics, surgery centers and home health agencies (as well as hospice providers.) Secretary Kennedy, are you aware that President Trump's Department of Justice is reportedly investigating? Reportedly investigating UnitedHealthcare for criminal insurance fraud in some of their for-profit health insurance plans like Medicare Advantage?

RFK: I'm not aware of that investigation. 

AOC: You are not aware that the Trump Department of Justice is investigating the largest insurance company in America for fraud and Medicare Advantage.

RFK: No I'm not aware of that.

AOC: That you have jurisdiction over –

RFK: It doesn't surprise me.

AOC: In your submitted testimony, you said, “HHS takes seriously our role as responsible stewards of taxpayer dollars.” Are you aware that for profit insurance corporations like UnitedHealthcare have been found to be defrauding public dollars of more than $80 billion a year.

RFK: I'm not aware of that number, but I'm aware that there's fraud across the for profit sector.

AOC: Respectfully, Secretary Kennedy, if we're making decisions around waste, fraud and abuse, this is the largest source of waste, fraud and abuse of public dollars in the public insurance space.

RFK: Did you say $80 million? 

AOC: $80 billion a year. 

RFK: Um, did you say $80 million or $80 billion?

AOC: 80 with a “B” – “billion”.

RFK: With a “B”? 

AOC: Yeah. If that's the case, why did you nearly double the rate that taxpayer dollars give for profit insurance companies like United next year, if you don’t know those things?

RFK: Doubled the rate, how did I do that? 

AOC: So, your agency nearly doubled the taxpayer dollars that for profit insurance corporations like United will be paid next year, meaning these companies, the largest of whom is under investigation – criminal investigation – by the Trump administration, will be receiving an additional $25 billion from your agency. 

RFK: How is that happening? 

AOC: I would be happy to submit to the Congressional Record evidence of this. I will enter the CMS press release from April 7, 2025, into the record, which states that “Medicare Advantage corporations will now receive a 5.06% increase in payments next year” under your jurisdiction, Mr. Secretary. This is up 2.2% from the Biden administration. You are doubling the rate that Biden… criminally investigated companies.