Social

Healthcare in America

The United States spends twice what comparable countries pay for healthcare — and gets measurably worse outcomes. The gap is not accidental.

The short version

The U.S. spends approximately 17% of GDP on healthcare — nearly double the OECD average — yet ranks last or near-last among wealthy nations in life expectancy, infant mortality, maternal mortality, and avoidable deaths.
About 25–30 million Americans remain uninsured even after the Affordable Care Act; medical debt is the leading cause of personal bankruptcy in the United States and virtually nonexistent in comparable countries.
The price differential is the primary driver of excess spending: Americans pay two to six times more for the same drugs, procedures, and hospital stays as patients in Canada, Germany, or Japan — not because they receive more care, but because prices are not regulated.
Every other wealthy democracy has achieved universal coverage through some combination of public insurance, regulated private insurance, or direct public provision — suggesting the choice not to do so in the U.S. reflects political decisions, not economic or logistical impossibility.

What it is

The United States healthcare system is a fragmented patchwork of public and private coverage that has resisted systematic rationalization for over a century. Working-age Americans typically receive insurance through their employer (a legacy of World War II wage controls that exempted employer-sponsored benefits from ceilings, cementing employment as the primary insurance vehicle). People 65 and older receive Medicare, a federal single-payer program enacted in 1965. Low-income Americans receive Medicaid, a joint federal-state program with varying eligibility and benefits by state. Veterans receive care through the Veterans Health Administration, a government-run health system. Children in low-income families may receive coverage through the Children's Health Insurance Program (CHIP). Everyone else either buys individual insurance through ACA marketplaces, goes uninsured, or relies on emergency rooms that are legally required to provide stabilizing care regardless of ability to pay.

The Affordable Care Act of 2010 was the most significant expansion of coverage since Medicare and Medicaid. It extended Medicaid eligibility to adults with incomes up to 138% of the federal poverty line (in states that accepted the expansion), created regulated insurance marketplaces with income-based subsidies, prohibited insurers from denying coverage or charging more based on pre-existing conditions, and allowed children to remain on parents' plans through age 26. The law reduced the uninsured rate from approximately 16% to around 9% at its peak. It did not create universal coverage — the Supreme Court's 2012 ruling in NFIB v. Sebelius made the Medicaid expansion optional for states, and twelve states had still not expanded Medicaid as of 2025. An estimated 25–30 million Americans remained uninsured as of 2024, concentrated in non-expansion states and among low-income working adults who fall into the coverage gap between Medicaid eligibility and ACA marketplace subsidies.

What distinguishes the United States from every other high-income country is not the structure of insurance alone but the prices underlying the system. Americans pay substantially more for pharmaceuticals, physician services, and hospital care than patients in comparable countries — not because they receive more care per episode but because the prices charged are dramatically higher. A knee replacement that costs $16,000 in Spain costs $28,000 in the U.S. The drug Humira costs approximately $2,600 per month in the U.S. and approximately $500 in the United Kingdom. Insulin that costs $30 in Canada costs $300 in the United States. These differentials exist because the U.S. does not regulate healthcare prices; every other wealthy country does so through some combination of government negotiation, rate-setting, and reference pricing. American prices reflect the bargaining power of individual insurance plans against individual hospitals and pharmaceutical companies — a structure that systematically disadvantages patients and taxpayers.

The international comparison is straightforward and persistent. The Commonwealth Fund's Mirror, Mirror report has ranked the U.S. healthcare system last or near-last among comparable wealthy nations in multiple categories — including overall performance, equity, access, and administrative efficiency — in every report it has produced since 2004. The U.S. ranks last on life expectancy among wealthy nations at birth (approximately 76.4 years in 2021, compared to 83+ in Japan, Switzerland, and Spain) and near-last on infant mortality and maternal mortality — the latter of which reached a 52-year high in 2021 at 32.9 deaths per 100,000 live births, a rate three to five times higher than comparable countries. These outcomes do not reflect a failure to spend: the U.S. spends more per capita than any country in the world and more than twice the OECD average. They reflect a system that distributes spending and access unevenly enough that large portions of the population receive inadequate care regardless of aggregate expenditure.

Why it matters

Medical debt is the most direct mechanism by which the healthcare system's dysfunction translates into personal catastrophe for American households. A 2022 KFF analysis found that approximately 100 million Americans — nearly one in three adults — carried medical debt, with 12 million owing more than $10,000. Medical debt is the leading cause of personal bankruptcy in the United States, a phenomenon that is essentially absent in countries with universal health systems. The bill for a hospital stay, an emergency surgery, or a cancer diagnosis can be financially ruinous for a middle-class family with insurance, because American insurance design typically involves significant out-of-pocket costs — deductibles, copays, coinsurance, and out-of-network charges — that can reach tens of thousands of dollars per year for serious illness. In Canada, Germany, Japan, and Australia, none of this exists.

The coverage gap has measurable mortality consequences. People without health insurance delay or avoid medical care because of cost, resulting in later-stage diagnoses, reduced management of chronic conditions, and higher rates of preventable hospitalization. A 2021 study in the Proceedings of the National Academy of Sciences estimated that approximately 45,000 Americans die annually as a result of lacking health insurance — a figure that has been revised upward in subsequent analyses. The uninsured are overwhelmingly not the unemployed or the poor (who qualify for Medicaid) but the working poor in non-expansion states: adults who earn too much to qualify for Medicaid but too little to afford marketplace insurance, caught in the coverage gap that the Supreme Court's 2012 ruling on the Medicaid expansion created.

The administrative cost of the American healthcare system is itself a major driver of expense and a direct measure of systemic inefficiency. A 2019 study in JAMA found that administrative costs — billing, coding, prior authorization, claims processing — consumed approximately 34% of U.S. healthcare expenditures, compared to 12% in Canada's single-payer system. American hospitals employ more billing staff than nurses in some facilities. American physicians spend roughly twice as many hours on administrative tasks as their Canadian counterparts. These costs exist because the U.S. system requires negotiating with hundreds of distinct payers, each with its own formularies, prior authorization requirements, and reimbursement codes. A single-payer system eliminates most of this overhead by definition, which is part of why countries that have one spend less while covering everyone.

The political economy of American healthcare is the primary reason the system persists in its current form despite its documented failure by almost every outcome measure. The health insurance industry, hospital systems, and pharmaceutical companies collectively spend more on lobbying than virtually any other sector — approximately $700 million annually as of 2023. They have successfully defeated every major push for universal coverage since Truman's proposal in 1948, including the Clinton health reform effort in 1993 and multiple subsequent proposals. The peculiar irony is that the same government already operates some of the most effective healthcare programs in the country: Medicare's administrative overhead is approximately 1.4%, compared to 12–18% for private insurers, and the Veterans Health Administration regularly outperforms private systems on quality metrics. The capacity for public healthcare exists and functions; the political will to extend it universally has consistently been defeated by the industries whose profits depend on the current arrangement.

Healthcare in America

The short version

What it is

Why it matters

Sources & Further Reading