Here’s How Much the Middle Class Spent on Healthcare in the 1970s vs. Now

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America’s healthcare costs are among the highest in the world, having totaled nearly $4.5 trillion as recently as 2022, according to the Peter G. Peterson Foundation. That averages out to more than $13,000 per person. Even though part of the cost is picked up by insurers, many middle-class Americans still face healthcare bills that would have been unimaginable during the 1970s.

In 1970, for example, total U.S. healthcare spending was $74.1 billion, according to data from Peterson-KFF Health System Tracker. When you account for inflation, the total was $434.9 billion in 2022 dollars — roughly 1/10th the actual amount spent in 2022, the most recent year for which data is available.

Healthcare spending continued to rise during the 1970s, as seen in the following chart:

Even when you factor in inflation, healthcare costs in the 1970s don’t come anywhere near what they are these days. Here’s how much Americans spent on healthcare during the first three years of the current decade:

• 2020:  $4.16 trillion
• 2021: $4.29 trillion
• 2022:  $4.47 trillion     

The difference is even more stark when you break the costs down per capita. Here is the approximate average spending per person during three years of the 1970s vs. three years during the 2020s (population figures are from Macrotrends):

• 1970: $369 per person (U.S. population 200,328,340)
• 1975: $628 per person(211,274,535)          
• 1979: $997 per person (220,463,115)
• 2020: $12,370 per person (335,942,003)
• 2021: $12,730 (336,997,624)
• 2022: $13,214 per person (338,289,857)

Since 1979, per capita costs have risen by roughly 13-fold — far outpacing overall inflation. Health insurers cover part of the above costs, but not all of them. Out-of-pocket healthcare expenses have also skyrocketed, rising from $219 per person in 1979 (or $723 in 2022 dollars) to $1,425 per person in 2022.

Healthcare costs hit middle-class households especially hard because they don’t have the wealth to easily cover out-of-pocket expenses, and many don’t qualify for financial help from government or charitable organizations.

So why are healthcare costs so much higher today than in the 1970s? One reason is the aging population, according to the Peterson Foundation. People 65 and older spend more on healthcare, which means total healthcare costs also go up over time.

Here are some other factors that contribute to higher healthcare costs, as cited by the Peterson Foundation:

• New technologies can increase the cost of procedures and products.
• America’s highly complex healthcare system can result in administrative waste.
• Consolidation of hospitals reduces competition between providers, which can increase prices.

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