The United States has one of the most advanced healthcare systems in the world, but it is also one of the most expensive and complex. Unlike countries with universal healthcare, the US relies on a mix of private insurance and government programmes to provide medical care.
Most Americans get health coverage through private insurance, often provided by employers. Government programmes like Medicare and Medicaid cover the elderly, disabled, and low-income families, while millions remain uninsured. The Affordable Care Act (ACA) of 2010 expanded access to health insurance and made it illegal to deny coverage for pre-existing conditions.
Healthcare costs in the US are among the highest globally, driven by expensive treatments, prescription drugs, and administrative costs.
Here are some common myths and the facts that debunk them:
Myth 1: The main problem is that sick people can’t find insurance.
Reality: Insurance protects against future risk, not pre-existing conditions. Sick, uninsured people need health care, not insurance, as per PubMed.
Myth 2: Covering the uninsured saves money by reducing ER visits.
Reality: Insurance encourages more care use, not less. Universal coverage improves health but does not automatically cut costs.
Myth 3: America has the best healthcare system.
Reality: The US is strong in treatment and diagnostics but ranks 37th globally in overall healthcare, including coverage and access, according to Bill Roper, Dean of UNC School of Medicine.
Myth 4: Lack of insurance is the main barrier to high-quality care.
Reality: Quality varies by location, not just insurance, as per PubMed. Even insured patients often receive less than 60 per cent of recommended care.
Myth 5: Employers can shoulder more of the cost of insurance.
Reality: Rising insurance costs ultimately reduce employee wages. Employers typically pass on much of the financial burden through lower compensation or limited benefits.
Myth 6: High-deductible plans and competition alone will lower costs.
Reality: Greater cost sharing can reduce some low-value care but may also prevent patients from getting high-value treatments. Smart insurance design, not just high deductibles, is key.
Myth 7: Everyone gets the care they need eventually.
Reality: Millions are left out, as per Bill Roper. Medicaid has strict eligibility, and many low-income Americans cannot afford insurance.
Myth 8: The cost of healthcare is not a problem.
Reality: Costs are a major barrier. The US spends over $3 trillion per year on healthcare, which can crowd out other priorities like education, as per Roper.
Myth 9: ‘Medicare for All’ would save Americans money.
Reality: Studies estimate federal spending could rise by $34 trillion, requiring major tax increases for Americans, according to America’s Health Care Future.
Myth 10: Americans would pay less even with higher taxes.
Reality: Most people would pay more than they do with private insurance today.
Myth 11: People could keep their healthcare providers.
Reality: Workforce reductions and system changes could eliminate millions of jobs and limit provider access.
US Healthcare: The Facts
As of 2019, approximately 50 per cent of Americans received insurance through their employers, 6 per cent purchased private plans via health insurance marketplaces, 20 per cent were covered by Medicaid, 14 per cent by Medicare, and 1 per cent by other public programs such as the Veterans Health Administration (VHA) and the Military Health Service (MHS), leaving around 9 per cent uninsured, as per ISPOR, the International Society for Pharmacoeconomics and Outcomes Research.
Healthcare financing in the US involves financial flows between households, employers, insurers, and government entities. Both public and private hospitals receive payments from a combination of these sources.
Hospitals are commonly reimbursed using the Diagnosis-Related Group (DRG) system, which provides a fixed payment for specific diagnoses or treatments. This model, used widely by Medicare and private payers, covers accommodation, procedures, staff, and medical device costs, though physician fees are billed separately.
In outpatient settings, Ambulatory Payment Classification (APC) codes are used to determine reimbursement, reflecting a fee-for-service approach. Physicians and clinicians use Current Procedural Terminology (CPT) codes to bill for their services independently, in both inpatient and outpatient settings.
Private insurers pay hospitals based on various models such as DRGs, case rates, per diem payments, or discounted fee-for-service schemes. Generally, private insurance payments exceed the cost of services provided, whereas payments from Medicare, Medicaid, and care for uninsured patients often fall below the actual cost of treatment.
For International Visitors: Key Facts About US Healthcare
For international students and visitors, MIT Health lists five facts about the US healthcare system:
- No universal healthcare – everyone must pay for their own medical care.
- Care is expensive – a broken leg may cost about $7,500, and a three-day hospital stay about $30,000.
- Health insurance is essential – regular payments (premiums) help cover high medical costs.
- You will have a Primary Care Provider (PCP) – your main doctor or nurse practitioner for checkups, illnesses, and ongoing care.
- Appointments are required – call ahead to see your PCP; urgent needs are prioritised.