US healthcare system explained

Irishdude

Irishdude

Member
There are lots of posts from non U.S. people about the U.S. healthcare system, so I thought I would explain it for their benefit.

First of all, it's not a system at all. During WWII labor shortages and wage freezes caused employers to offer health benefits to new workers. These became embedded in employment practices. Full-time workers at companies employing more than 50 people are all offered health care coverage through their employers. Private coverage extends to 53 percent of the population, or 66 percent of those insured.

Second, the U.S. government covers many people: Its own workers, veterans through the Veterans Administration, the poor through Medicaid, and those over 65 through Medicare. These programs cover about 35 percent of the population.

About 8 percent of the population is uninsured. According to the Commonwealth Fund, "an estimated 26 million (8%) Americans lacked health insurance in 2023, with disproportionate representation among Hispanic and American Indian/Alaska Native (AIAN) adults, low-income individuals, and young adults aged 19–25. While coverage has improved overall, uninsured rates remain highest in Southern states, particularly for people with less than a high school education"

Many people in the uninsured category are eligible for Medicaid but don't know about the program or choose not to apply for whatever reason.

People not eligible for employee insurance are required to buy insurance through "Obamacare." This is a Federal program supporting state-sponsored "exchanges" which offer insurance to the self-employed and others. Obamacare is pretty unpopular (I'm trying to be objective here) because a) it's very expensive; b) it mandates coverage of things that people might like to skip; and c) it's very complex and the rules are always changing.

Premiums for private insurance are usually subsidized by employers but can take a big bite out of paychecks. There are often caps and deductibles which can cause financial problems. Health care providers are incentivized to charge as much as possible because "insurance is paying."

It's a very imperfect system, to say the least. However the vast majority of people have coverage and the quality of care in the U.S. is considered high. So it's not the howling, atavistic wilderness that some folks think it is.

If I've missed anything, let me know. Of course this is a book-length topic.
 
I asked AI if our system was as good as other developed countries :

That is a very thorough and level-headed summary from your forum member. He hit the historical "accident" of how we got here perfectly—specifically how WWII-era wage freezes turned health insurance into a "fringe benefit" that we are still stuck with 80 years later.

Response to the Healthcare Synopsis​

"That’s an excellent breakdown of the 'how' and 'who' of the U.S. infrastructure. It’s important for our non-U.S. friends to see that it’s a patchwork quilt, not a designed system.
However, if we zoom out to see how this 'imperfect system' actually performs compared to other developed nations (like those in the OECD), the picture gets a lot darker. While the quality of our top-tier specialists is world-class, the system itself is currently ranked at the bottom of the pack for developed countries.
Here are a few 'missing' pieces that illustrate why many feel the U.S. position is in serious trouble:
  • The 'Value' Gap: We spend nearly $15,000 per person—double what the UK or Australia spends—yet we are the only high-income nation where life expectancy has been trending downward in recent years. We are paying the highest price in the world for shorter lives.
  • Administrative Waste: Because of the complexity mentioned in the post (Obamacare rules, private caps, deductibles), about 30% of every healthcare dollar in the U.S. goes to billing, marketing, and insurance paperwork. In countries with 'Single-Payer' systems, that overhead is usually closer to 2-5%.
  • The 'High Quality' Myth: While we have the best technology, the Commonwealth Fund consistently ranks the U.S. last overall among 11 high-income countries. We rank last on Access to Care, Administrative Efficiency, Equity, and Healthcare Outcomes.
  • The Hidden Uninsured: The post mentions 8% are uninsured, but it's the 'Under-insured' that are the real crisis for seniors and families. These are people with insurance who still can't afford their $5,000 deductibles.
 
Paco Dennis said:
The Hidden Uninsured: The post mentions 8% are uninsured, but it's the 'Under-insured' that are the real crisis for seniors and families. These are people with insurance who still can't afford their $5,000 deductibles.
Click to expand...
This very real problem is often overlooked. Like , if you have insurance, you have no problems. Coming up with the money for copays, specialists, and overpriced medicines can be a real problem. By the time you’ve almost met the deductible (unless you have a catastrophic illness or accident) it’s a new year and it starts all over again.
 
Irishdude said:
People not eligible for employee insurance are required to buy insurance through "Obamacare." This is a Federal program supporting state-sponsored "exchanges" which offer insurance to the self-employed and others. Obamacare is pretty unpopular (I'm trying to be objective here) because a) it's very expensive; b) it mandates coverage of things that people might like to skip; and c) it's very complex and the rules are always changing.
Click to expand...
While the Affordable Care Act (ACA), often called "Obamacare," was highly unpopular in its early years, its public perception has shifted significantly. As of early 2026, around two-thirds of the public holds a favorable view of the law.
Despite the early backlash, the ACA's favorability has increased as its core protections became more established:
  • Popular Provisions: Provisions such as protecting those with pre-existing conditions and allowing children to stay on their parents' insurance until age 26 are widely supported across both political parties.
  • Fear of Repeal: Polls have frequently shown that repealing the ACA is actually more unpopular than the law itself, as people fear losing their current coverage or protections.
  • Expanded Coverage: The law has significantly reduced the number of uninsured Americans through Medicaid expansion and federal subsidies.
2/3 favorability is actually fairly high for anything these days!
 
The Core Conflict: Quality vs. Cost
The primary "howling" from critics usually stems from the financial burden rather than the clinical quality:
  • High Costs: The U.S. spends more on healthcare per capita than any other wealthy nation—roughly $15,000 per person as of 2024–2025.
  • Affordability Gaps: Even with insurance, rising premiums (projected to increase by a median of 15–18% in 2026) and high deductibles can make accessing that high-quality care difficult for some.
  • Variable Outcomes: While specialized care is world-class, the U.S. lags behind peer nations in broader public health metrics like life expectancy and infant mortality, often due to disparities in access and socioeconomic factors.
 
I had insurance through the Affordable Care Act for a while when I worked for an employer who didn’t/couldn’t provide health insurance. I was very grateful for it as that was when my issues with glaucoma really got serious. I was able to visit my eye doctor regularly. When I had an acute glaucoma attack in one eye, which almost cost me my eyesight in that eye, I was able to see my doctor quickly.
Later, I was employed at a different job that did supply insurance but I was not eligible because I was a part time employee. I could only work part time because I was caretaking my stepfather and mother.
Affordable Care insurance got me through that time as well.
 
Many Americans are simply unaware of the law's impact or its specific provisions:
  • Uninsured Rates: Only about one-third of adults are aware that the uninsured rate has dropped to an all-time low since the law passed.
  • Popular Provisions: While protections for pre-existing conditions are overwhelmingly popular, fewer than half of Americans realize these protections are actually part of the ACA.
 
RambleTamble said:
While the Affordable Care Act (ACA), often called "Obamacare," was highly unpopular in its early years, its public perception has shifted significantly. As of early 2026, around two-thirds of the public holds a favorable view of the law.
Despite the early backlash, the ACA's favorability has increased as its core protections became more established:
  • Popular Provisions: Provisions such as protecting those with pre-existing conditions and allowing children to stay on their parents' insurance until age 26 are widely supported across both political parties.
  • Fear of Repeal: Polls have frequently shown that repealing the ACA is actually more unpopular than the law itself, as people fear losing their current coverage or protections.
  • Expanded Coverage: The law has significantly reduced the number of uninsured Americans through Medicaid expansion and federal subsidies.
2/3 favorability is actually fairly high for anything these days!
Click to expand...
You're right, of course. I should have said "controversial" and not "unpopular." Costs are way out of control and the program only stays afloat through massive federal subsidies.
 
Paco Dennis said:
I asked AI if our system was as good as other developed countries :

That is a very thorough and level-headed summary from your forum member. He hit the historical "accident" of how we got here perfectly—specifically how WWII-era wage freezes turned health insurance into a "fringe benefit" that we are still stuck with 80 years later.

Response to the Healthcare Synopsis​

"That’s an excellent breakdown of the 'how' and 'who' of the U.S. infrastructure. It’s important for our non-U.S. friends to see that it’s a patchwork quilt, not a designed system.
However, if we zoom out to see how this 'imperfect system' actually performs compared to other developed nations (like those in the OECD), the picture gets a lot darker. While the quality of our top-tier specialists is world-class, the system itself is currently ranked at the bottom of the pack for developed countries.
Here are a few 'missing' pieces that illustrate why many feel the U.S. position is in serious trouble:
  • The 'Value' Gap: We spend nearly $15,000 per person—double what the UK or Australia spends—yet we are the only high-income nation where life expectancy has been trending downward in recent years. We are paying the highest price in the world for shorter lives.
  • Administrative Waste: Because of the complexity mentioned in the post (Obamacare rules, private caps, deductibles), about 30% of every healthcare dollar in the U.S. goes to billing, marketing, and insurance paperwork. In countries with 'Single-Payer' systems, that overhead is usually closer to 2-5%.
  • The 'High Quality' Myth: While we have the best technology, the Commonwealth Fund consistently ranks the U.S. last overall among 11 high-income countries. We rank last on Access to Care, Administrative Efficiency, Equity, and Healthcare Outcomes.
  • The Hidden Uninsured: The post mentions 8% are uninsured, but it's the 'Under-insured' that are the real crisis for seniors and families. These are people with insurance who still can't afford their $5,000 deductibles.
Click to expand...
Thank you for doing that, Paco. I didn't have the energy or the expertise to get into this kind of depth.
 
the real kick in the pants is that someone with insurance (an example of a few years ago) can have an office visit for $85. someone without insurance can have the same office visit for $55. what i don't understand is why is it $30 higher for the person with insurance? why not the same $55? it just seems pretty messed up to me. we're paying out the nose for our premiums each paycheck just to get charged more?
 
MarciKS said:
the real kick in the pants is that someone with insurance (an example of a few years ago) can have an office visit for $85. someone without insurance can have the same office visit for $55. what i don't understand is why is it $30 higher for the person with insurance? why not the same $55? it just seems pretty messed up to me. we're paying out the nose for our premiums each paycheck just to get charged more?
Click to expand...
"Messed up" doesn't begin to explain it.
 
Not wanting to rock the boat but insurance has become worse after the ACA. the forced coverage added $$$$ to every plan private or ACA. I worked it know what is on it.
Like any insurance home auto etc we sometimes find how good or bad our coverage is after there is a problem.

I worked for years in health insurance during the ACA rollout was a fiasco because people had no idea what they wanted or seemed to not understand what they were getting. Many in my area by a very large city I knew had the ACA found it nearly impossible to find providers who took it. So, what is the point if you can only use in emergency or drive an hour to get to some place who accepts it. That is still a problem here.

During rollout people literally signed up for 3 or 4 plans the company offering plans had to weed it out later. Through incentive to sell it many brokers signed people up that would have no premium because it was taxpayer covered numerous times. That is why a small premium for all was suggested like 5 dollars for those who were not paying anything . Fraud harder to hide if people find out their identity was used to sign up over and over.
I was working the HUGE signup for a blue cross company that offered plans they were so excited like 3000 applications to process except when we weeded out the people who on computer put in many options and had duplicate applications we dropped to under 700. I wonder if some had applications with other companies and how much taxpayer money was wasted.
We all finished most in 2 weeks was trickling in, so we watched movies and played board games:oops:. I found different job as I felt that was wrong to be paid for a maybe we will get more applications. The number of hands involved in processing and customer service and negotiating denials all add costs to the everything.
I remember when I was a kid the doctor had office, his wife was his nurse and one lady answering phone and do billing. My parents did not have insurance, and we saw Dr when needed and paid that day.
Now the admin staff has doubled or tripled to navigate the insurance maze.
Insurance is an item that the basics should be taught in Adulting 101 like personal finance. more know their deductible on their car insurance then what their medical coverage is.
Many do not know what their deductible is and sometimes even co-pay is until they get a bill ...knowing what is covered and if they pay 80 or 70 percent why do people seem confused about being billed for the 20-30 percent.

If they chose a high deductible, they should have opened a HSA if possible or at least a savings account to have some reserve in case. I would like the HSA option opened for all not just high-deductible plans...

Worse yet is no one seems to read their EOB other than the $ part. Many medical bills have bad actors try to collect items not owed like the negotiated insurance amount. If people do not know how to read EOB they most likely are sweating it out as owed.
Read an estimate that up to 30 percent of medical debt involves those amounts.
That literally is the only surprise bill I ever had, and it was their error. I told biller I have my EOB I know the rules was literally told "most fall for that and pay anyway" this was not a collection company but a biller for a doctor group.
So, I turned them in to BBB and called my insurance company who told that DR group fire them or none of our members can use your group. I heard they got a new biller.

More and more concierge doctors' groups popping up around here it is cheaper to pay up front, or cash price then pay the insurance dance. Many doctors had to add staff just to play insurance chess, an office visit without is much less.
I view it same as cash price at the gas station is less than if you use credit.
 
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