We figured out how healthcare works in the United States, what problems it has, and how some politicians propose to change the system.
On a September evening in 2021, Lora Laflamme went with her friends to a bar in their native Laredo, Texas. When she was standing near the counter, a fight broke out in the establishment. One of the participants in the brawl launched a bottle at another man but accidentally hit Lora. The last thing she remembers is the blood and screams of her friends. Then everything happened in fragments. Ambulance, anesthesia, a surgery table…
The local doctors said they couldn’t do anything about the damaged eye. It was a small town – not enough specialists. Doctors only treated the wound and removed the remnants of glass from it. A few weeks later, Lora found out that she owed the hospital $5,000. Since she was a university student, she did not yet have her insurance, only a scholarship. Lora’s parents had already retired, so she could not use their insurance.
“It was a terrible time, I needed a serious operation, I couldn’t see my eyes, and the doctors continued to send bills. $5,000 is the biggest of them, but there were others. I borrowed $3,000 from my friends but that was not enough. The only possibility to cover expenses was to apply for a quick loan. I borrowed the remaining amount there fbtet.com/payday-loans-laredo-texas.html. Thank God I got the money quickly – within 3 hours or so. This was the only way to get cash instantly, with no checks and collateral. Although a payday loan comes with interest, it can be a savior in an emergency, especially if it’s health-related.” Lora told us.
The US is one of the few developed countries without universal health insurance
Despite advanced medicine, the American health care system remains one of the main problems of the United States. The reason for this is the prohibitive prices that taxpayers and the state are forced to spend on medical services. Most medical facilities in the country are private and set their own rates. So, calling a regular ambulance can cost a patient without insurance of several thousand dollars or more. At the same time, it is unlikely that anyone will be able to explain where exactly this amount came from. Bills for surgery and other complex procedures can run into the hundreds of thousands. A person who has been diagnosed with a serious illness is at risk of becoming bankrupt. For non-payment of the required amount in some states, the debtor can be imprisoned.
Treatment in the country is financed mainly by private insurance paid by citizens or their employers. To get insurance, you must have a regular and certain income. However, not all employers are ready to offer their employees an insurance plan. For small firms and start-ups, these costs are often unaffordable.
Since 1965, the country has had two social programs: Medicare – for people aged 65 and older and Medicaid – to help those in need. Both exist through taxes but do not always fully cover the bills of patients. Due to the aging of the population, Medicare costs continue to rise, and medical costs are called one of the main reasons for the American budget deficit.
It was Barack Obama who tried to reform healthcare in the US the last time
To do this, the ex-president adopted the Patient Protection and Affordable Care Act (PPACA) in 2010. In the US, it is better known as Obamacare.
The law obliged all employed citizens without insurance to purchase it through special websites and exchanges. At the same time, the state took over part of the payments (in the form of tax benefits). The amount of assistance depended on the annual income of a citizen. If it was more than 400% of the minimum poverty threshold (it is different in different states), then subsidies were not provided. At the same time, those who earned less than this threshold also could not participate in the program (no tax, no benefits). Simply put, there were no subsidies for those who earn too much or too little. The poor were paid for emergency hospitalization, medicines, pregnancy care, and pediatric care.
In addition, Obama’s law required insurance companies to deal with people who already had a disease. Prior to this, it was almost impossible for such unprofitable clients to find an insurer. In addition, the reform set a limit on the amount that the patient, in which case, has to pay extra out of his own pocket. Parents were allowed to include children under 26 in their insurance plans. Large employers began to be fined for refusing to insure their employees.
At the same time, Obama introduced an annual fine for uninsured citizens (in 2014 it was $95, in 2015 – $275, since 2016 – about $400). This provision was later declared unconstitutional. The adoption of Obamacare has significantly increased the number of insured citizens. Before the reform, about 85% of Americans had insurance, but by 2017, about 91% of residents already had it.
Despite these results, many were dissatisfied with Obamacare. Some lost the insurance they had already bought, although the president promised that this would not happen. Companies that could not fit their insurance plans to the new legislation had to leave the market. Rural US residents have complained that their incomes are too high to qualify for Medicaid but not enough to qualify for government tax breaks. For many young and healthy, a single visit to the doctor still cost less than Obamacare payments. But the main thing is that the reform has led to a serious increase in the prices of insurance premiums.
“To repeal and replace Obamacare” was Trump’s top campaign promise
The law has been relentlessly criticized by Republicans, in particular by power-hungry businessman Donald Trump. Instead of Obamacare, he proposed to achieve “transparent pricing” from pharmaceutical companies and to transfer to state governments all the powers to manage Medicaid.
“This unaffordable health care law will soon be history!” he wrote. Obama himself considered this law one of the main achievements of his presidency.
After taking office in 2017, Trump signed an executive order that allowed him to circumvent some provisions of the Affordable Care Act. Several attempts to reverse the reform completely failed in the Senate. However, the Republicans managed to achieve the abolition of fines for refusal of insurance and cut spending on the treatment of the poor.
According to American conservatives, Obama’s reform did not achieve its goal and only increased the cost of medical services. Republicans saw access to health care not as a right of every citizen but as a service received by those who could pay for it. At the same time, US civil servants themselves enjoy one of the best medical insurance.
In December 2018, a federal court in Fort Worth, Texas, overturned the Obamacare reform based on lawsuits from 20 states. The court recognized that the government cannot force citizens to buy any goods by means of laws. Trump called the verdict “great news” for America.
According to the decision of Judge Reed O’Connor, Obamacare was contrary to the basic law of the country, in connection with which the entire system was declared untenable.
56% of Americans believe that providing citizens with access to medicine is the state’s responsibility
Such data showed the results of a survey of the CBS television channel. Two-thirds of citizens approve of the creation of a national public health insurance plan similar to Medicare. In the US, the topic of health care was touched upon in the election season. The program of almost each candidate provided for a point on the reform of the system. According to the KFF Health Tracking Poll, debaters prioritized this topic over other issues.
At the same time, health care became of dividing barrier between candidates in 2020. Not everyone saw the solution in the same way.
The most radical proposal came from Vermont Senator Bernie Sanders. His plan was to create a system of “single payer” Medicare for All. According to this program, each citizen pays a monthly health tax to the treasury, and when he falls ill, he goes to the hospital and receives all medical services free of charge. At the same time, he does not have to pay extra out of his own pocket for any procedures, medicines and “special offers”. All bills are covered by the state. The Sanders model completely excluded insurance companies from the healthcare industry. The single payer system operates in Canada, the UK, New Zealand, Australia, Norway, Sweden and other countries.
Going forward, Sanders planned to expand its program to include dentistry, eye care, home care, inpatient and outpatient care, mental health and addiction treatment, maternity care, prescription drug coverage, and more. The senator also called for control over the pharmaceutical industry, which he said was “robbing the American people.”
Other candidates, such as South Bend Mayor Pete Buttigieg and Joe Biden (who won the presidency), favored a more moderate approach.
According to Biden, the model proposed by Sandres could put about two million Americans employed in insurance medicine out of work. The Democrat also predicted a serious increase in the tax burden on the middle class. Biden himself advocated the preservation and development of Obamacare, in the creation of which he personally participated.
Massachusetts Senator Elizabeth Warren had another option. She, like Sanders, also advocated for Medicare for All but called for reform to begin with a reduction in the cost of medical services. In her opinion, citizens overpay because of the mediation of insurance companies, as well as because of additional services and medicines imposed by hospitals. Warren threatened to tax large corporations, but said taxes on businesses and ordinary Americans would not rise “one penny.”
Most US residents still prefer the insurance system
As a recent Gallup poll shows, Sanders and Warren’s proposals sounded too radical to voters. 54% of respondents said they prefer to be treated the old-fashioned way. However, the number of those who supported the single-payer system increased from 40% in 2018 to 42%.
More than 27 million Americans still live without health insurance. However, its presence does not mean guaranteed access to quality medical services. More than 101,000 Americans die each year simply because they had no insurance at all. The average cost of visiting an emergency room in the country is $1,265. The average cost of chemotherapy is from $7,000 to $30,000. In addition, U.S. life expectancy continues to fall in 2022. This is due to the increase in mortality among middle-aged Americans.
In addition, medical bills remain the leading cause of bankruptcies in the United States, and rising medical costs threaten to devastate the country’s budget. At the same time, the American healthcare system remains one of the most inefficient compared to other developed countries.
All this suggests that it will be difficult for the United States to do without new healthcare reforms in the coming years.