Appendix II: Private Social Insurance Expenditures
SSA's private social welfare expenditures series provides estimates of private sector financing of social welfare programs in the United States. The data presented here are from that series and cover the period 1972 to 1994 (the latest year for which complete data are available).
Private expenditures are grouped in four categories: health and medical care, welfare services, education, and income maintenance.
Viewed as a gross domestic product (GDP), private sector social welfare has gradually but substantially increased from 7.7% in 1972 to 13.3% in 1994. In the latter year, total expenditures were $921,465 billion.
In 1994, health and medical care expenditures claimed the largest dollar amount—$528.6 billion (57.4% of total private spending). Private sector funds paid 5.5% of all personal health care expenditures, mostly private health insurance and out-of-pocket spending. From 1972 through 1994, health expenditures declined slightly from 58.5% to 57.4% of total private social welfare spending.
The welfare services category includes individual and family social services, residential care, child day care, recreation and group work, and job training and vocational rehabilitation. In 1994, expenditures for these items were $86.3 billion, or 9.4% of the year's private social welfare total.
Private expenditures for education were $101.8 billion, or 11.1% of all private social welfare expenditures. Of this amount, $59.7 billion was spent on higher education, $21.2 billion on elementary and secondary school education, and $15.5 billion on commercial and vocational schools. Outlays for education have declined from 15.6% of total private sector spending in 1972 to 11.1% in 1994.
Income-maintenance expenditures are payments made by private sector employee benefit plans. These include private plans, group life insurance, cash disability insurance, paid sick leave, and supplemental unemployment benefits. Of the $204.7 billion in such expenditures, pension benefits accounted for $174.5 billion.
| Year | Public spending total2 | Private spending3 | Percent of gross domestic product | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Total | Health | Income maintenance | Education | Welfare services | Total4 | Public spending5 | Private spending6 | ||
| 1972 | $190,315 | $95,362 | $55,800 | $17,123 | $14,894 | $7,545 | 23.5 | 16.6 | 7.7 |
| 1975 | 288,458 | 128,556 | 75,700 | 23,336 | 19,453 | 10,067 | 25.2 | 18.2 | 7.9 |
| 1980 | 491,598 | 250,534 | 142,500 | 53,564 | 31,694 | 22,776 | 26.1 | 18.1 | 9.0 |
| 1985 | 730,897 | 462,283 | 253,900 | 118,871 | 50,513 | 38,999 | 27.6 | 17.8 | 11.1 |
| 1990 | 1,046,355 | 720,718 | 413,100 | 164,772 | 78,263 | 64,583 | 29.7 | 18.5 | 12.5 |
| 1994 | . . . | 921,465 | 528,600 | 204,736 | 101,832 | 86,297 | . . . | . . . | 13.3 |
| 1 In current dollars. | |||||||||
| 2 Fiscal year basis. | |||||||||
| 3 Calendar year basis. | |||||||||
| 4 Sum of public and private expenditures as a percent of gross domestic product, after adjustment to eliminate overlap that occurs when payments received under public or private income-maintenance programs are used to purchase medical care, educational services, or residential care. | |||||||||
| 5 Represents fiscal year expenditures as a percent of Federal fiscal year gross domestic product. | |||||||||
| 6 Represents calendar year expenditures as a percent of calendar year gross domestic product. | |||||||||
| Source: Social Security Bulletin, Vol. 60, No. 1, 1997. | |||||||||
| Expenditure source | 1972 | 1975 | 1980 | 1985 | 1990 | 1994 |
|---|---|---|---|---|---|---|
| Amounts in billions | ||||||
| National health expenditures | $90.9 | $130.7 | $247.2 | $428.2 | $697.5 | $949.4 |
| Private expenditures | 55.8 | 75.7 | 142.5 | 253.9 | 413.1 | 528.6 |
| Health services and supplies | 52.5 | 72.3 | 138.0 | 247.4 | 402.9 | 517.1 |
| Noncommercial medical research | .2 | .3 | .3 | .5 | 1.0 | 1.3 |
| Medical facilities construction | 3.1 | 3.2 | 4.2 | 6.0 | 9.3 | 10.3 |
| Public expenditures | 35.1 | 55.0 | 104.8 | 174.3 | 284.3 | 420.8 |
| Percent of gross domestic product | ||||||
| National health expenditures | 7.4 | 8.0 | 8.9 | 10.2 | 12.1 | 13.7 |
| Private expenditures | 4.5 | 4.6 | 5.1 | 6.1 | 7.2 | 7.6 |
| Public expenditures | 2.8 | 3.4 | 3.8 | 4.2 | 4.9 | 6.1 |
| Note: Numbers and percents may not add to totals because of rounding. | ||||||
| Source: Health Care Financing Administration, Office of the Actuary, Office of National Health Statistics. | ||||||