Healthcare in the United States: Why are there so many different insurance plans?

asks Vox reader Mike Lovely. Why does the U.S. continue to create new health insurance programs (CHIP, ACA, Medicaid Expansion Alternative, etc.) instead of consolidating them into one big program in which all insurance companies participate and everyone chooses coverage? I wonder if there is one?

Health insurance in America is a collection of brands and acronyms such as Medicare, Medicaid, VA, Tricare, ACA, CHIP, United Healthcare, and BCBS. My head hurts just listing them.

In most wealthy countries, people don't have to worry about considering a dozen different health plans. You also won't have to live in fear of losing your health insurance after losing your job, and you can receive quality care at a more affordable price than in other countries. Americans do. The paradox of the world's richest country having one of the weakest health systems in the developed world has long been a vexing policy problem with no easy solution.

Why does it work this way? It was more an accident of history and culture than intentional design. Today, the American system is working well enough, but not very well, and building a better system has not yet risen to the level of a political priority.

American health insurance as we think of it today began to take shape in the 1920s, when medical professions were being standardized and modern hospitals were being built. Some employers have begun offering payment for hospital-based services as a perk to employees. Businesses had large groups of employees, both healthy and sick, to spread risk and make finances work similar to modern insurance.

The system soon became sufficiently established that President Franklin D. Roosevelt sidestepped plans to include national health insurance as part of the New Deal. Then World War II broke out, and to keep the war machine running, the government mandated wage controls for private sector employees. Forbidden from giving raises to motivate employees, companies began increasing health benefits, and the government agreed to exempt these benefits from both wage regulation and taxes.

By the 1950s, employer-sponsored insurance was widespread among beneficiaries, and progressive labor unions urged the government to make the tax exemption permanent. Congress agreed and in 1954 made subsidies for corporate health plans federal law. The physician and hospital industry is growing into the Leviathan it is today, more accustomed to working with private insurance companies than directly with the government.

Today, these work-based health plans still cover about half of all Americans.

The problem with employer-based systems was that too many people were left behind because they weren't working or didn't have jobs that provided health insurance. To fill the gap, Congress created Medicare and Medicaid in 1965 to cover the elderly and the poor, the two largest groups with poor coverage.

After that expansion, we had a system that covered most Americans, but it was difficult to change because people were afraid of losing what they had.

These concerns were fueled by the health care industry's campaign against “socialized medicine,” an overhaul of the health care system proposed by Presidents Richard Nixon and Bill Clinton that would have integrated most Americans into a national insurance system. doomed. Certain trends in American culture—consumerism and trust in the private market—made it easier to convince the population that they would lose out under government-run health care programs.

Meanwhile, there were still glaring holes in the U.S. health care system. Rather than threaten the status quo, policymakers added new patches.

CHIP was approved in the 1990s and targeted children from working-class families whose incomes were not low enough to qualify for Medicaid. (However, their parents were often left with no coverage at all.) The Affordable Care Act of 2010, also known as Obamacare, provided benefits to people who did not receive health insurance through work. was designed to fill that gap by covering Become eligible for Medicaid.

However, despite more than 50 years and six rounds of progressive health care reform, approximately 1 in 12 people in the United States lacks health insurance, making Americans more likely than people in other developed countries to have health insurance. are far more likely to say they are skipping medical care because of cost.

Other countries have built their health systems more intentionally.

After World War II, Britain created the National Health Service and sought to extend health coverage to all citizens. Many other European governments followed suit.

Half a century later, another wealthy island nation made the same choice. After decades of authoritarian rule, Taiwan has built a modern democracy, abolished a fragmented and inequitable health care system, and established a universal health insurance program. It was a declaration of unity after the turbulent military dictatorship came to an end.

Although not all countries have opted for a single government program, their systems are still simpler than America's and cover the entire population. In 2006, the Netherlands abolished its dysfunctional two-tier insurance system, opting to introduce a universal program that would provide universal coverage while still relying on private insurance. The current uninsured rate is less than 1% (some people don't enroll).

But what about the US? We have never stopped to build a fairer, simpler, and more uniform health care system.

As the late Uwe Reinhardt, a prominent health economist at Princeton University, put it: “Canada and nearly all developed countries in Europe and Asia reached a political agreement decades ago to treat health care as a social good. By contrast, we in the United States are politically dominant on this issue. No agreement has ever been reached.”

In the 2020 Democratic presidential primary, multiple candidates announced “Medicare for All” proposals, a high water mark for Americans who want a streamlined health care system that covers everyone under one program. It is possible that it became.

Medicare for All, first proposed by Sen. Bernie Sanders (I-VT), would cover all Americans through federal insurance plans with minimal out-of-pocket costs. However, moderates expressed reservations about this proposal. Joe Biden has instead promised to pursue iterative reforms, and Kamala Harris is currently taking the same course.

A public option that gives more people the option of participating in government insurance programs like Medicare and Medicaid seems more viable than single-payer. But Biden did not want to jeopardize other policy priorities with a politically risky health proposal that could draw opposition from the health care industry, and despite campaigning on They did not even try to pass it.

Still, if you ask me what the path to a healthier health care system looks like, this is the model: voluntary adoption among Americans. Supporters of public options have long argued that the government would win if it could compete directly with private insurance companies. We may soon find out whether that proposition is true, as three states recently introduced their own public options.

From my own reports, I've heard that employers are reconsidering whether they want to take on the expensive and burdensome responsibility of managing Americans' access to health care. Some companies have discontinued their plans and instead opted to pay a fee for their employees to purchase insurance on the ACA Marketplace.

Maybe the flaws in American health care will eventually lead us to the same point that nearly all of our fellow nations have reached and are starting over with universal programs. Perhaps, at least in the short term, you'll keep an unnecessarily complex system, make small improvements, and hope for the best.

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