Why Americans can’t afford health care: the history

As increasing numbers of Americans are unable to afford health care, we must ask: Why does our health insurance system look like this? How did we get here, and how can we move to a health system that works for everyone?

To begin, we must understand that our health insurance system wasn’t designed for economic or ethical reasons. In fact, it wasn’t “designed” at all, but pieced together over the last century.


One hundred years ago — just after the discovery of antibiotics — the average life expectancy was 54 years. Doctors’ fees were low, but treatment options were limited, unregulated and had variable efficacy. Health insurance simply didn’t exist in the U.S.

As we developed new treatments and standards, the quality of medical care increased, but so did the costs. Blue Cross first sold health insurance as a nonprofit in 1929. Their plan cost 50 cents a month and only covered inpatient hospital care. By 1940, only 9% of Americans had health insurance.


During the labor shortage of World War II, President Franklin D. Roosevelt banned businesses from increasing wages, so employers competed by offering benefits such as health insurance, which wasn’t taxed as income. By 1950, half of Americans had health insurance; by 1960, two-thirds were covered, and the system of employer-sponsored private insurance had taken root.

This was also a time of critical change for the health insurance industry, as many insurers converted from nonprofit to for-profit status, changing the concept of insurance — and health care generally — from a public good to a commodity. From then on, insurers had a strong financial incentive to block a national health program.

President Harry Truman proposed a single-payer national health plan in both 1945 and 1948, but it was quickly killed by the combined forces of the Chamber of Commerce, American Medical Association (AMA), American Hospital Association and the major insurers, whose scare tactics included the threat of “socialized medicine.”

In the early 1960s, Presidents John F. Kennedy and Lyndon B. Johnson proposed what we now know as Medicare, a scaled-back version of Truman’s national health program that only covered the elderly and disabled. The AMA and insurance industry fought back, hiring Ronald Reagan as the spokesman for their anti-Medicare campaign. Reagan warned that if Medicare passed, “we are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.” Fortunately, Medicare was voted into law in 1965 and fully implemented less than one year later, immediately improving health care access for the elderly and disabled. But our failure to achieve a national health plan further entrenched the employer-based and profit-oriented insurance system in the U.S.

Bill Bramhall's editorial cartoon for Aug. 1, 2019, following the second round of Democratic presidential debates and a big focus on Medicare for All.

In the meantime, every other industrialized nation has since adopted a universal health system, at far lower costs and with far better outcomes compared to the U.S. Even though America spends the most on health care — 18% of GDP and rising — we have the highest infant and maternal mortality rates, the lowest overall life expectancy, and the highest rate of preventable death among industrialized countries.

How do we explain the uniquely American disconnect between high spending and poor health? The main culprit is commercial health insurance, which drains billions of health care dollars in profits and overhead, and requires hospitals and doctors to maintain massive billing departments to deal with hundreds of different insurers, each with their own rules and requirements. Administration eats up more than a quarter (25.3%) of American hospital budgets, compared to 12% in Canada’s single-payer system.

It’s not too late to go back to the drawing board on health care. In fact, we only need to go back to Medicare — an efficient and popular program. We can improve Medicare’s coverage to include vision, hearing, dental, mental health and long-term care, and then expand it to cover all ages. A well designed single-payer system can save $504 billion annually on paperwork and profits, plus $113 billion more on prescription drugs.

As a primary care physician, I see more and more of my patients avoiding care due to uninsurance or skyrocketing copays and deductibles. Each day they postpone care, they get sicker. And each year that we as a nation fail to reform our health system, we will spend more money and watch our nation’s health fall further behind. A majority of Americans and their physicians now support Medicare for All. It’s time for our elected leaders to follow.


Dr. Laura Kaplan-Weisman ( is a family physician in Gaithersburg.