Brief history about healthcare in the United States (US) and the lack of universal healthcare.

1. IMS Observer - Issue 13
Why Does the United States not have Universal
Healthcare?
Healthcare in the United States (US) is different than most industrialized nations in the world.
The US is one of the few such nations which does not have universal healthcare coverage.
Why? Many argue that universal healthcare could prevent thousands of deaths every year and
even help prevent bankruptcy caused by medical expenses, among other benefits. Others
argue that such a drastic healthcare reform would induce a huge burden on American
taxpayers, as universal healthcare is not free. By looking at US healthcare in both historical and
legislative contexts, we can find clues to this puzzle.
A LOOK INTO THE PAST
Phase I: From Humble Beginnings
The healthcare system originated in the early 1900s where several group health insurance
plans arose because of increased concern of work-related injuries, sicknesses, and absences.
As this issue attracted the public’s attention, people began to wonder who would pay for job-
related medical leave and medical expenses.
Even though demand for increased insurance coverage was rising among the working class,
physicians and insurance companies did not feel the same towards healthcare reform.
However, with the onset of The Great Depression, there were major shifts in many Americans’
priorities. As a result, public attitudes towards healthcare access also began to teeter on the
edge of change.
Phase II: Modern healthcare system taking shape
In the 1930s, The Great Depression ushered in a time of uncertainty and a shift in priorities.
More people faced problems caused by unemployment and debt. Hospitals too became buried
under a heavy burden; admitted patients could not pay their medical bills, patient quantity
decreased, and many new hospitals went bankrupt.
Imminent reform was needed, and President Franklin D. Roosevelt expressed interest to
make healthcare coverage a required part of the new Social Security Act that had recently been
signed into law. As Roosevelt’s plans did not take hold, the people rose to enact change. 1,500
teachers in the Dallas area offered prepaid premiums to Baylor Hospital in exchange for 21
days of future hospital care. This system marked the beginning of Blue Cross, an insurance
company that traditionally provided private coverage for hospital-related services. Blue Cross’s
success gained enough momentum to spread to several states. Blue Cross began the
emergence of the private healthcare sector in the US.
Within the next decades, US healthcare underwent more transformations.
Medicare and Medicaid
signed into law
Shift towards the
privatization of healthcare
1965 1980s
American Health
Security Act
19931930s
Blue
Cross
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2. IMS Observer - Issue 13
In 1993, the American Health Security Act (AHSA) was passed. The program’s aim was to
provide healthcare for all Americans through its “managed competition” strategy. States were
now required to establish regional health alliances that helped oversee the coverage private
insurers gave to their clients. Under the AHSA, every health plan was required to provide a
basic level of benefits.
Phase III: What About Today?
The Affordable Care Act (ACA), or more commonly known as Obamacare, is perhaps the
biggest healthcare reform ever made in the United States. It was signed into law by President
Obama in 2010.
The goal of Obamacare is to give more Americans access to affordable, quality health
insurance and to reduce the growth in US healthcare spending. It expands the affordability,
quality, and availability of private and public health insurance through consumer protections,
regulations, subsidies, taxes, insurance exchanges, and other reforms.
By the end of the open enrollment exercise in 2015, an estimated 11.7 million people were
enrolled in state and federal marketplaces. 10.8 million more were covered through Medicaid
and Children’s Medicaid (CHIP) and 5.7 million young people were able to stay on their parents’
plan. Additionally, many were covered through employers who expanded coverage under the
ACA and on private plans outside of the marketplace1
.
1
Obamacare Facts. (n.d.), ObamaCare Enrollment Numbers. Retrieved December 03, 2015, from ObamaCare Facts:
http://obamacarefacts.com/sign-ups/obamacare-enrollment-numbers/
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3. IMS Observer - Issue 13
How the Legislation Works in the U.S:
Could the Universal Healthcare Bill Get Passed?
Throughout its history, reforms have transformed healthcare in the US from having limited
health coverage to possessing many added benefits.
From the beginning, the checks and balances form the foundation of the US political system.
The US has established entities that prevent too much federal government control, such as
state governments, the US Constitution and the checks and balances system.
Due to these power-limiting entities, the federal government has historically limited involvement
in US healthcare, and therefore the private sector has assumed responsibility. As these private
sectors have grown in size and authority, total government intervention would be quite difficult.
In addition, as healthcare spending constitutes a major percentage of the US economy (total
healthcare spending accounted for 18% of US GDP in 2014), handing control completely to the
government may be a line many Americans are not willing to cross.
Lastly, as universal healthcare is not free, taxes would have to be be greatly increased in order
to pay for this system.
The United States (US) is one of the only developed countries that does not have universal
healthcare. However, both historical and legislative factors point to why this situation exists
in the US. Firstly, historically speaking, US healthcare has undergone copious reforms,
causing shifted levels of private and public healthcare involvement. Secondly, in terms of
passing new legislation, the checks and balances system has a great influence on whether
the universal healthcare system bill is passed, or not.
Considering the controversy surrounding universal healthcare in the , this legislation will
be difficult to pass. The US has a unique healthcare situation. However, only time will tell
what subsequent healthcare reforms the US will pass, and if these reforms will lead to
universal healthcare coverage.
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○C 2015 IMS Health Incorporated and its affiliates. All rights reserved. Trademarks are registered in the United States and in various other countries