19.4.1 U.S. Healthcare

U.S. healthcare coverage can broadly be divided into two main categories: public healthcare (government-funded) and private healthcare (privately funded).

The two main publicly funded healthcare programs are Medicare, which provides health services to people over sixty-five years old as well as people who meet other standards for disability, and Medicaid, which provides services to people with very low incomes who meet other eligibility requirements. Other government-funded programs include service agencies focused on Native Americans (the Indian Health Service), Veterans (the Veterans Health Administration), and children (the Children’s Health Insurance Program).

Private insurance is typically categorized as either employment-based insurance or direct-purchase insurance. Employment-based insurance is health plan coverage that is provided in whole or in part by an employer or union; it can cover just the employee, or the employee and their family. Direct purchase insurance is coverage that an individual buys directly from a private company.

Even with all these options, a sizable portion of the U.S. population remains uninsured. In 2019, about 26 million people, or 8 percent of U.S. residents, had no health insurance. 2020 saw that number go up to 31 million (Keith 2020). Several more million had health insurance for part of the year (Keisler-Starkey 2020). Uninsured people are at risk of both severe illness and also chronic illnesses that develop over time. Fewer uninsured people engage in regular check-ups or preventative medicine, and rely on urgent care for a range of acute health issues.

The number of uninsured people is far lower than in previous decades. In 2013 and in many of the years preceding it, the number of uninsured people was in the 40 million range, or roughly 18 percent of the population. The Affordable Care Act, which came into full force in 2014, allowed more people to get affordable insurance. The uninsured number reached its lowest point in 2016, before beginning to climb again (Garfield 2019).

People having some insurance may mask the fact that they could be underinsured; that is, people who pay at least 10 percent of their income on healthcare costs not covered by insurance or, for low-income adults, those whose medical expenses or deductibles are at least 5 percent of their income (Schoen, Doty, Robertson, and Collins 2011).

Why are so many people uninsured or underinsured? Skyrocketing healthcare costs are part of the issue. While most people get their insurance through their employer, not all employers offer it, especially retail companies or small businesses in which many of the workers may be part time. Finally, for many years insurers could deny coverage to people with pre-existing conditions--previous illnesses or chronic diseases.

The Patient Protection and Affordable Care Act (often abbreviated ACA or nicknamed Obamacare) was a landmark change in U.S. healthcare. Passed in 2010 and fully implemented in 2014, it increased eligibility to programs like Medicaid, helped guarantee insurance coverage for people with pre-existing conditions, and established regulations to make sure that the premium funds collected by insurers and care providers go directly to medical care. It also included an individual mandate, which requires everyone to have insurance coverage by 2014 or pay a penalty. A series of provisions, including significant subsidies, are intended to address the discrepancies in income that are currently contributing to high rates of uninsurance and underinsurance. In 2012 the U.S. Supreme Court upheld the constitutionality of the ACA's individual mandate. 29 million people in the United States have gained health insurance under ACA (Economic Policy Institute 2021). The individual mandate required by the ACA was abolished via subsequent legislation in 2019.

The ACA remains contentious. The Supreme Court ruled in the case of National Federation of Independent Businesses v. Sebelius in 2012, that states cannot be forced to participate in the PPACA's Medicaid expansion. This ruling opened the door to further challenges to the ACA in Congress and the Federal courts, some state governments, conservative groups and independent businesses. The ACA has been a driving factor in elections and public opinion. In 2010 and 2014, many Republican gains in Congressional seats were related to fierce concern about Obamacare. However, once millions of people were covered by the law and the economy continued to improve, public sentiment and elections swung the other way. Healthcare was the top issue for voters, and desire to preserve the law was credited for many of the Democratic gains in the election, which carried over to 2020.