In the past two weeks, a torrent of online vitriol has been directed at the health insurance sector. This outpouring has laid bare the deep-seated feelings of despair, powerlessness, and anger experienced by millions of Americans who believe they have been betrayed by our healthcare system. When perusing the “About us” pages of major health insurance providers’ websites, one is greeted with grand mission statements like Aetna’s vow to assist individuals in “living a healthier life” and United HealthCare’s aim to “make the healthcare system function better for everyone.” Simultaneously, UnitedHealthCare’s press release for its investor conference projects cash flows from operations to range from $32 billion to $33 billion in 2025.

The Dissonance in the System

This cognitive dissonance is not solely the fault of insurance companies. Instead, it serves as a reflection of how the United States healthcare system is structured. In contrast to other countries, we rely on a market-based approach where insurance companies and hospitals are expected to operate as economic entities. It is a system that is long overdue for reform.Before the advent of health insurance companies in the early 20th century, Americans financed healthcare through their personal savings or via charitable and mutual aid societies. Health insurance emerged in the 1930s and 1940s with the intention of safeguarding individuals from unexpected financial risks and enhancing access to necessary healthcare services. From the outset, healthcare insurance in the United States has been primarily employer-based, meaning it is offered by employers as a benefit to employees. It is delivered through private companies such as UnitedHealth, Aetna, and Cigna. While government-sponsored programs like Medicare, Medicaid, and the Affordable Care Act marketplaces serve specific qualifying populations based on age or income, employer-sponsored health insurance remains the predominant source of coverage in the country.

The Current State of Affairs

In present-day America, 1,176 private health insurers offer an astonishing array of plans. In 2022 alone, the six largest health insurers collectively amassed $41 billion in profits, as reported by Becker’s Healthcare. With such a large number of companies, effective regulation becomes challenging and costly, despite documented instances of false advertising, deceptive marketing, and fraudulent sales practices. Private insurance plans also carry an average administrative overhead of 12.4%, compared to a mere 2.2% in traditional Medicare.The United States allocates more than $4.5 trillion to healthcare, according to the Kaiser Family Foundation. Despite spending such a significant amount on care and having 92% of the population with health insurance, 41% of U.S. adults still grapple with healthcare debt.This issue extends beyond health insurance coverage; it demands a fundamental reconstruction of our healthcare system to minimize waste and enhance value. Experts have estimated that establishing a single-payer healthcare system could save approximately $450 to $503 billion annually. Single-payer does not always have to resemble the United Kingdom’s National Health Insurance, where most hospitals and healthcare providers are publicly funded. Countries like Canada and Spain utilize single-payer systems that are regionally managed and financed, with a more prominent role for private delivery of healthcare services and private insurance. And undoubtedly, there are other alternatives that may be well-suited to the U.S. context, such as Germany’s multi-payer system, which pools risks to provide universal coverage. Perhaps the most promising avenue for the United States is the public option, which I have discussed in a previous article. This approach would enable people to choose to enroll in a government-administered plan, likely at the state level, that could compete with private insurers.As an emergency physician who has lived and worked in multiple countries with universally funded healthcare, it is evident to me that overall, Americans receive inferior care and encounter greater obstacles to care. Despite this, we spend a staggering amount - up to $88 billion in medical debt, according to the Kaiser Family Foundation. This is not a burden borne by a small segment of the population; 100 million Americans - nearly one in three - are plagued by medical debt. Such a level of financial hardship is unheard of in other developed countries.We simply cannot continue on this trajectory. Whether it is a public option, multi-payer system, single-payer system, or something entirely novel, reforming how we finance and deliver care is the only viable way to address the dysfunction that is causing so much despair across our nation.