The killing of a UnitedHealthcare executive has prompted a closer look at the health insurance industry.
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The American health care system leaves much to be desired.
It is convoluted, fragmented, complex and confusing. The experts also raised quality concernsAnd disparities are endemic. And of course it is excessively expensive – much more than in any other developed country. Given these failures, it is not surprising that the Americans dissatisfied with their health system.
Like the public reaction The assassination of UnitedHealthcare CEO Brian Thompson made this clear, but many Americans may be more unhappy with their health insurers. Indeed, only 31% of Americans have a favorable opinion of the health insurance industry, according to a 2024 survey.
However, given recent tragic events, health policy specialistI think it would be prudent to step back and think about the healthcare system as a whole and how the United States got to this point.
Many sources of frustration in health care
Few people with personal experience or professional expertise could describe health care in the United States. as the reference in health systems.
For a number of historical and political reasons, it is hardly a “system” but rather a complex patchwork with countless different approaches to covering health care costs, which include cost allocation between individuals, employers and governments.
Governments have also largely regulate health and healthcare and, although in a diminished role today, serve as a healthcare provider through state and county hospitals as well as the Veterans Health Administration.
The result is a regulatory amalgam composed of countless entities. THE Affordable Care Act Reforms has only added additional layers of laws and regulations to an already complex framework.
Yet beyond this general structure, Americans face many challenges. Indeed, no other healthcare system in the world is more expensive. This involves costs for medical services, but also extremely high administrative costs. Pharmaceuticals are just one example of the excessive financial burden borne by Americans.
For many Americans, these costs are too high, with around 530,000 medical bankruptcies per year.
And despite this high price, concerns persist about quality and access.
Additionally, the system tends to be very inequitable and subject to countless disparities this makes it harder for many poorer, rural, and non-white Americans to access care.
Health care advocates protest denials of care at UnitedHealthcare on July 15, 2024 in Minnetonka, Minnesota.
David Berding/Getty Images for the People’s Action Institute
The role of insurers
In the United States, insurers play a crucial role by connecting – and sometimes disconnecting – patients with the care they need.
They are also at the forefront of many of Americans’ most acute frustrations — even those for which they are not directly responsible. While medical providers and pharmaceutical companies charge the highest prices in the worldit is generally up to insurers to tell patients how much they still have to pay or that their care will not be covered. Insurers are also the ones who determine if a drug isn’t covered or if a doctor is “out of network,” meaning patients can’t get the specific treatment or care they want.
Of course, insurers are not only messengers: they also add to the many frustrations experienced daily by patients. For example, a patient you may have to travel very far Or wait a long time for an appointment if their network of providers is too narrow or simply does not have enough suppliers. Additionally, directories and searches that insurers use to indicate which providers are “in-network” may be inaccuratelike they is rarely updated.
In the United States, insurers play a crucial role in connecting – and sometimes disconnecting – patients from the care they need.
For many people this can mean delayed or abandoned carewhich has major implications on their health and finances. For some, it can even lead to preventable deaths.
Some of the practices insurers are most infamous for, such as cancellation of coverage for minor administrative issues and refusing to cover pre-existing conditions, was terminated under the ACA. But some of these problems could return if the new Trump administration seeks to roll back some of the ACA’s protections.
Even today, what we call short term and limited duration health plans promise good coverage for lower premiums, but even basic items may not be covered. Many plans, for example, do not cover prescription drugs or even hospital emergency rooms.
Blame the system, not just the insurers
Why do insurers act the way they do? For many, the answer may seem simple: make money. This, of course, it rings true – insurers in the United States raise billions of dollars. However, while they tend to be profitabletheir margins generally vary only from 3 to 5%.
But the story is more complicated than that. With limited government powerInsurers may be the only force in the U.S. health care industry trying to curb rising costs in a health care system where everyone seeks to maximize profits.
This means that insurers assume the role of bad cop, for example by limiting access to certain treatments or certain doctors. But there are several prudent reasons for doing so; for example, it is in the public interest for insurers not to cover medications that have been shown to be ineffective or of poor quality. And ultimately, it keeps premiums lower than they would otherwise be. Of course, insurers and their CEOs benefit greatly from it in the process. And sometimes, their methods are ethically and legally questionable.
Ultimately, many, if not most, of the health care frustrations Americans experience have their roots in a system that is poorly designed, highly inefficient, and offers countless opportunities for profit. Yet insurers are only one element – perhaps the most visible – of this failing system.