What Americans Are Actually Paying for "Private" Healthcare

What Does Healthcare Actually Cost? Canada vs. the United States, By the Numbers

If you've spent any time in the comments section of a healthcare debate online, you've seen it play out a hundred times. A Canadian says, "Our healthcare is free." An American fires back, "No, it isn't — you pay for it through taxes." And honestly? The American is right. But there's a piece of this argument that almost always gets left out: Americans also pay enormous amounts for healthcare through their taxes, and then most working-age families turn around and buy private insurance on top of that.

I'm Dr. Rob Beck, host of The Interesting MD Podcast, and in 2020 I left the United States after nearly a decade of practice and started over in Canada. That move changed how I think about medicine, money, and what a physician's life can actually look like. So I wanted to step away from the usual guest conversation this week and just ask one question, without the noise about wait times or which system is "better": What are we actually paying for healthcare in each country?

The Headline Numbers: Canada vs. the United States

Let's start with Canada. In 2025, Canada was projected to spend about $399 billion Canadian dollars on healthcare — roughly $9,626 CAD per person. That's total spending, public and private combined, with about 71% publicly financed and 29% private. Health Canada describes Medicare as a single-payer public insurance system financed through progressive taxation, and in the 2024–2025 fiscal year, the federal government transferred about $52.1 billion to the provinces and territories through the Canada Health Transfer.

Now look south. In 2024, the United States spent about $5.3 trillion total on healthcare — approximately $15,474 USD per person. Those numbers aren't directly comparable (different currencies, different economies), but even after adjusting for purchasing power, the U.S. spends dramatically more than Canada per person.

Here's where it gets interesting: the U.S. is usually described as a "private" healthcare system, but that's far from the truth. Medicare alone costs $1.12 trillion a year. Medicaid costs another $932 billion. Together, that's roughly $6,000 per person in public spending on Medicare and Medicaid alone — and that doesn't even include the VA, ACA subsidies, or other government health programs. Americans are already financing a massive public healthcare system through taxes. Then most working families layer private insurance on top of that.

The Hidden Cost of "Private" Insurance in America

Let's take an average American family of four with employer-sponsored insurance. According to KFF data, the average family health insurance policy in 2025 cost $26,993 per year. The employee's visible cost — what shows up on your pay stub — is about $6,850. But the employer pays another $20,143 that never appears on that stub.

This is the number people miss constantly online when they say, "My insurance only costs me $4,000 a year." It doesn't cost $4,000. It costs nearly $27,000. The other $20,000 is part of your total compensation — it's money that could otherwise go toward wages, retirement contributions, or profit, but instead goes to buying your health insurance.

And you're still not done. Deductibles, co-pays, co-insurance, prescription costs, and out-of-pocket maximums stack on top of that. Average individual deductibles approach $2,000, and many families carry much higher ones to keep premiums down. In our own family, when my kids were on my policy in the U.S., each person had their own deductible, and even hitting my personal deductible didn't exempt my kids from paying their own co-pays and cost-sharing. A typical insured American family can be out an additional several thousand dollars a year beyond premiums — and it all resets every January 1st.

So the average insured American family is paying through three separate layers: taxes, insurance premiums, and cost-sharing at the point of care.

What a Canadian Family Actually Pays

Now cross the border to a family of four in British Columbia. There's no monthly MSP premium anymore, no deductible for medically necessary physician and hospital services, and no co-pays to see your doctor. It's financed through general taxation — not a dedicated "healthcare tax," just part of overall government revenue.

Using rough estimates based on federal and provincial transfers, a BC family earning $50,000 contributes about $850 a year in income taxes toward healthcare. At $100,000, that's about $3,550 — roughly 3.5% of income. At $189,000, it climbs to around $11,000. At $250,000, about $17,400. And if you're earning a million dollars a year, you're contributing roughly $110,000 toward the healthcare of your fellow citizens. The Fraser Institute, using a broader methodology that includes sales tax and corporate taxes, puts the $189,000 household figure closer to $19,000 — so the real number is almost certainly higher than my rough estimate, but the shape of the system is clear: it's progressive. Higher earners pay dramatically more, lower earners pay very little, and Canadians generally seem fine with that trade-off.

Compare that to a similar family in Washington State — no state income tax, fairly conservative, right across the border. A household earning $114,000 pays about $5,700 in federal taxes tied to public healthcare, then $6,850 in premiums, with their employer kicking in another $20,143, plus roughly $3,500 out-of-pocket. Add it up and you're approaching $36,000 a year in total economic resources tied to that family's healthcare — even though no one ever writes a single check for that full amount.

Would Single-Payer Actually Save Americans Money?

A recent Yale School of Public Health preprint (not yet peer-reviewed, so treat it accordingly) modeled a national single-payer system and estimated U.S. healthcare spending could fall by roughly $1 trillion a year — from $5.28 trillion to about $4.24 trillion. Even their more conservative estimate put savings at $663 billion annually. The savings would come mainly from administrative efficiency, drug pricing, reduced fraud, and fewer avoidable ER visits — even after accounting for new costs from covering the currently uninsured.

Yes, taxes would almost certainly go up under such a system. But that's not the number that tells you whether you're better off. The real question isn't "how much would my taxes rise?" It's "what happens to the $27,000 a year my family and my employer are already spending on insurance?" If $8,000 in new taxes replaces $27,000 in disappearing premiums and out-of-pocket costs, that's not a wash — that's a very different financial picture than the one usually presented in the debate.

The Takeaway

This isn't an argument for one system being better than the other — Canada has real problems too, including wait times and primary care shortages, and some Americans get excellent, fast care through private insurance. But the idea that the U.S. has avoided the cost of publicly financed medicine by relying on private insurance simply doesn't hold up. Americans are paying for public healthcare and private healthcare, layered on top of each other.

If you're a physician navigating a move between these two systems — or just trying to make sense of the numbers for your own family — I'd love to hear your experience. Email me at rob@interestingmd.com, and let's keep having the real conversation instead of the slogans.