Why Doesn't the US Have Universal Health Care?

The Rest of the Iceberg

What does the United States have in common with Peru, Zimbabwe, Bangladesh, and Uzbekistan? Answer: none of them have a universal health care system. The US is the only country in the developed world that does not provide health care to all of its citizens. Before the Affordable Care Act, or Obamacare as it is more commonly known, more than 40 million Americans did not have any health insurance, meaning that sickness could mean bankruptcy. After Obamacare, the number was still 28 million.

The US federal government actually pays for a lot of health care. If you are old, very poor, or ex-military, the government foots the bill. That’s 37% of the population. But the system is hardly efficient. What the US pays for less than half of its population is more than what every other country pays to look after all their citizens, even after you have adjusted for population size (Norway and the Netherlands are the only exceptions).

The rest of the world thinks it’s strange and even heartless that the richest country on earth doesn’t seem to be able to look after its own people. That judgment may be a little harsh, as we’ll see. But the health care set-up in the US is certainly unusual. Why?

Let’s start with some factors that help us understand why the US doesn’t have universal health care but that aren’t decisive.

First, size. The USA is a big country, and it’s harder to organize a standard health care system than in, say, Spain. But Russia manages it, as does China, which has many more people. Canada is another huge, diverse country, but it has universal coverage. Besides, the US government is able to run complex educational programmes across the land. The national tax system also works pretty well.

Second, culture. Is the US so full of rugged individualists that a universal health system would be impossible? Probably not. There’s a social security system to look after all those hardy individuals once they’re old and worn out, so it’s not difficult to imagine something similar for them when they’re sick. Nor will it do to say that full health care would be a grotesque socialist inroad in the land of the free. Social Security is pretty socialist, and almost everyone loves it.

Third, politics. Is US politics so divided that there’s no way they could pass the legislation that would be needed? Maybe. This wouldn’t explain, however, why the US didn’t enact major health reform after the Second World War, when many other developed countries did so. Of greater relevance is probably the US system of government itself. It was set up to make it hard for any person, party, or part of the system to do very much on their own. Passing anything has usually been a big challenge.

So, here are three factors that play a part, but aren’t enough to explain why the US doesn’t provide health benefits for all. What does? Vested interests, diversity, and a fortunate history.

Vested interests. Spending on health care makes up a staggering 17.4% of American GDP. That’s double what Australia or Japan spends, and more than 5% more than its nearest competitor. There are a lot of people making a lot of money from the current health care system in the US. That includes hospitals, doctors, pharmaceutical corporations, and insurance companies. The only way the US could afford universal care would be to cut costs. That would mean confronting some or all of those who benefit from the current state of affairs. That would be very hard. It might even be impossible.

The diversity of the US also helps explain the absence of a universal health care system. If you go back a hundred years, the first countries where workers successfully pressed for pensions and unemployment insurance were relatively homogeneous places like Germany and Britain. Workers in the US were asking for the same things at the same time, but it was much harder to mobilize people when not everyone spoke the same language, and there were plenty of young, scrappy and hungry immigrants willing to work for whatever.

Universal health care works best in countries where people feel strong solidarity with one another. They think that everyone else in society is basically the same as them. But that’s never been the case in the US. The sheer size and cultural diversity of the country, and especially the old and painful divisions over race mean that it’s all too easy for Americans to feel that their fellow citizens are not like them at all. So why should they pay taxes for other people to get looked after? Health care coverage in the US has a racial edge. 71% of whites under 65 have insurance coverage, but only 47% of African Americans and 39% of Hispanics. You can see the same dynamic in Europe now, too. A common complaint that some Europeans make against immigrants is that they take resources from their welfare systems. People are more reluctant to share with people who aren’t like them.

Finally, history. Most European countries set up universal health systems after the Second World War. So many had died (tens of millions), so many made homeless (tens of millions), so many bereaved (hundreds of millions) that it was hard to argue against the idea that every citizen deserved the chance of a decent, healthy life. The impulse was the same for winners and losers, in the West and the East. Christian intellectuals persuaded many people with their vision of compassionate, social solidarity.

The American experience of the Second World War was very different. 400,000 died, but the country looked better after it than before. The war had brought the US out of the Great Depression and the country was now the leader of the free world. It still had big problems, as the Civil Rights movement would show, but the postwar mood was triumphant, not somber. America was the richest, strongest country ever. It was easy to overlook those who couldn’t afford eyeglasses, let alone surgery.

There’s no need to romanticize Britain’s National Health Service, or any other universal system. They are imperfect, and if you’re really sick and have insurance the American system will usually be better. You could also make the argument that as the West loses manufacturing jobs it’s good to have tens of thousands of people doing all of the admin and billing that the infinitely complex American system requires.

The case in favour of universal health care is strong, however. Life expectancy is a good indicator of health. Thirty countries do better than the US. Average height is another measure, and here the US does even worse.

Obamacare was flawed, but it was a step in the right direction. Health care may not be a human right, but it’s sad that millions in America fear that getting sick could mean humiliation, destitution, or worse.