How U.S. Health Care Reform Works

By: Molly Edmonds

The Road to Health Care Reform

A woman expresses her opinion of her current insurance.
A woman expresses her opinion of her current insurance.
Alex Wong/Getty Images

In the 1940s, the government implemented price controls and froze wages in an effort to curb wartime inflation. What remained unfrozen and untaxed were fringe benefits that a worker received, so employers, desperate for decent labor, offered health insurance as a workplace perk. As a result, the United States ended up with a system in which most citizens receive their health insurance through their employer. No other country relies on an employer-based system to the extent that the U.S. does.

This system works for many with full-time jobs; a 2009 CNN poll found that approximately eight in 10 Americans were satisfied with their health insurance [source: Steinhauser]. However, critics of the system would say that such an opinion is akin to "ignorance is bliss." Most workers likely have no idea of the full cost of their company's plan, and they may be unaware how much the cost of health insurance has been rising in the last few years. The money disappears before workers can even know it's gone, perhaps in the form of an increased premium withheld from a paycheck or by employers skimping on raises in order to make insurance payments.


The unemployed, self-employed, part-time workers and those who work for companies that don't offer benefits probably have a better sense of how much health insurance truly costs. It's far more expensive for individuals and small groups to get health insurance because they constitute a small risk pool; a large company provides a large risk pool for the insurance company, which allows the company to charge smaller premiums. Liberal politicians since the time of Harry S. Truman have wanted to change the health care system in order to provide coverage to more people. These efforts have largely failed, with the notable exception of Lyndon B. Johnson's passage of Medicare and Medicaid, which provide health insurance for seniors and for those with low incomes, respectively. In 2009, about 47 million Americans lacked health insurance [source: Tumulty].

Liberals and conservatives could argue all day about whether it's the government's responsibility to provide health care for its citizens. But beyond the question of whether there's a mandate for health care, there's evidence that the system wasn't working as well as it should. In the U.S., we spend approximately $6,000 per person each year on health care, which is $2,797 more than any other industrialized country spends [source: Clifton]. While we do have state-of-the-art hospitals and the highest quality equipment, the United States also has higher rates of infant mortality and lower life expectancies than other countries that spend but a fraction of what we do.

Moreover, citizens with health insurance may find out just how little bang for the buck they receive when they get sick. In presenting the case for health care reform to the American people, President Barack Obama often used examples of people whose insurance was cut when they became terribly sick, such as a woman who was denied a double mastectomy because she had omitted declaring a pre-existing condition of acne [source: White House]. So what was his proposal for addressing such problems?