America Pays Twice What Other Rich Nations Do for Health Care. Can Democrats Fix That?

Two days after the Affordable Care Act marketplaces opened for 2027 enrollment, voters delivered their verdict on what Americans pay for health care.Democrats won control of both chambers of Congress on November 3, including at least 55 Senate seats, in an election that turned heavily on the cost of living. Half of midterm voters told KFF that Democrats were the party best able to handle health care, compared with 30 percent for Republicans. Some 55 percent said the Trump administration’s policies had made their own health costs worse, and 83 percent of that group backed Democratic candidates for the House.The bills that sent those voters to the polls are still coming. Insurers have proposed a median increase of 15 percent for 2027, after a 20 percent increase this year, which would put typical premiums more than a third higher than their 2025 level. Federal figures released ahead of enrollment put the average rise at 11 percent on HealthCare.gov and 16 percent in states that run their own marketplaces, with fewer insurers to choose from. The enhanced subsidies that held premiums down expired in January, and Congress has not brought them back.The new majorities will not arrive in time to help. The incoming Congress will be sworn in on January 3, while Americans who want coverage starting from January 1 must sign up by December 15.Democrats have yet to settle on how far they want to go once they do take over. The House minority leader, Hakeem Jeffries, who is expected to become speaker, said in August that he does not currently support Medicare for All, a notable retreat from a Democratic priority. He has instead promised early votes to restore the expired subsidies and reverse nearly $1 trillion in Medicaid cuts.Some of his party’s biggest winners ran well to his left. Abdul El-Sayed took an open Michigan Senate seat on a platform centered on Medicare for All. In Maine, Troy Jackson, who also campaigned on it, unseated Senator Susan Collins.Whatever the politics, America’s health care spending is hard to defend on the numbers alone. Health care claimed 18 percent of the entire American economy in 2024, the most recent full year for which the data is available; that is nearly double what the average wealthy nation spends, according to the Centers for Medicare and Medicaid Services.Switzerland, the next-highest spender among rich countries, devotes just under 12 percent of its GDP to health care while keeping its citizens alive more than five years longer, on average. Japan and South Korea deliver some of the best outcomes on the planet while spending far less, roughly 11 percent and 9.4 percent of GDP, respectively. That is about half to two-thirds of what Americans spend as a share of their economy.For that premium, Americans get less.The United States is the only wealthy country without universal health coverage, or even a clear plan to get there. American life expectancy sits around 79 years, several years below the average across comparable countries, and the nation trails its peers on infant mortality, maternal safety and preventable death.Economists who study the system agree on the diagnosis. They disagree, sharply, on the cure.“The United States pays much higher prices for most goods and services than the other countries,” a professor of health policy at the Johns Hopkins University School of Medicine, Gerard Anderson, tells The New York Sun. “For example, drug prices for brand-name drugs like Ozempic are three times what other countries pay, and other services have a similar differential.”The Debt Nobody Can Pay OffIf prices, not care, are the real culprit, that raises an obvious question for Mr. Jeffries and his incoming majority. Why does the fight keep centering on who administers coverage instead of what Americans are actually being charged?Enhanced Affordable Care Act subsidies, which expired in January 2026, had cut premiums by more than half for most marketplace enrollees. Now the fallout from their expiration is already being felt, even though the Census Bureau’s latest count found the uninsured rate holding at 7.9 percent in 2025 before the subsidies lapsed. The report covering 2026 is the one to watch.The House passed a three-year extension of the subsidies in January, with 17 Republicans joining Democrats, but the Senate never acted and no extension has become law. Mr. Jeffries has said restoring the subsidies will be among the first votes of the new House. Any bill would still need President Trump’s signature, and he has threatened to veto legislation he dislikes.Marketplace sign-ups fell by more than a million for 2026, the first year-over-year decline since 2020. The Urban Institute projects that about 4.8 million people will end up uninsured outright this year as premiums more than double for the average previously subsidized enrollee.Roughly 41 percent of American adults now carry some form of medical debt, whether on a credit card, a payment plan or an unpaid bill sitting with a collector, according to a KFF poll conducted with Urban Institute research.Bankruptcy filings keep climbing, too. The total for the 12 months ending in June 2026 reached 608,511, a 12.2 percent jump from the year before, and filings for all of calendar 2025 reached 574,314, an 11 percent rise, according to the Administrative Office of the United States Courts. Medical bills are among the most commonly cited reasons.The subsidy expiration is only speeding up a problem that predates it.“A private foundation, KFF, recently reported that the average premium for a worker is now $27,000 per year, which represents a large portion of their take-home income,” Mr. Anderson points out. “It is more likely to increase as the healthy people drop out and only the sicker people are willing to pay the higher premiums.”The figure is taken from KFF’s 2025 survey of employer family coverage, which averaged $26,993.Why the Fixes Keep StallingHealth policy researchers have spent years trying to explain why American spending runs so far ahead of the results it buys. Administrative costs are a major piece of the puzzle.The United States spends several times more per person on health system overhead than peer nations. The gap comes from running a fragmented system of private insurers, employer plans and government programs rather than a single coordinated one.Hospital and physician payments are the largest single driver of the spending gap, although prescription drug costs draw the most political attention. Hospital care and physician services made up 52 percent of national spending in 2024, while prescription drugs accounted for 9 percent.The tax code, more than any other single chokepoint, keeps the incentives pointed the wrong way, according to a health economist who studies the market from the political right.“Americans suffer from a much higher rate of obesity and the costliest chronic medical conditions,” a senior fellow at the Manhattan Institute, a conservative-leaning think tank, Chris Pope, tells the Sun.“Letting individuals, rather than employers, control the purchase of health insurance” has “mostly been impeded by the tax exemption which previously extended only to insurance bought by employers,” he continues. He argues that “industry lobbying is effective when they can mobilize real voter concerns,” and that underneath the fight is “real disagreement over policy and ultimately a fight over money.”In simple terms, an employer, not the patient, picks the insurance plan, and neither the doctor nor the patient sees the real price of care beforehand. So almost nobody in the system has much reason to bargain costs down.Others blame the gridlock more squarely on money in politics. Health care lobbying has climbed for years: PhRMA, the drug industry’s leading trade group, spent a record $38.2 million on federal lobbying in 2025, and the pharmaceutical and health-products sector as a whole spent a record $457.3 million, more than any other industry tracked by OpenSecrets.One libertarian scholar says the entire fight traces back to a single decision Congress made decades ago and has refused to revisit since.“Repeal federal income and payroll taxes. Doing so would eliminate the tax preference for employer-sponsored health insurance, which is the original sin of U.S. health policy,” the Cato Institute’s director of health policy studies, Michael Cannon, tells the Sun. He underscores that the preference “increases prices, premiums, waste, fraud, opacity, gaps in coverage and access, and low-quality care.”Industry money alone does not explain the inaction, Mr. Cannon continues. “Industry lobbyists genuinely believe that what’s good for near-monopolist hospital systems and health insurance companies is good for consumers and make sincere policy arguments to that effect.”Many of the people who run the hospitals and insurance companies believe their size helps patients. A big hospital system can afford better equipment and specialists than a small one, and a large insurer can negotiate lower prices than the government could get through a one-size-fits-all program.They worry that breaking up that system, even to fix its problems, would mean worse care, not better. That belief helps explain why these fights never really end.None of the fixes on the table is new, and none lacks a constituency ready to defend the status quo. A single-payer system, in which the government rather than private insurers pays for everyone’s care, would erase the administrative duplication researchers blame for much of the overhead gap. But it also threatens to eliminate the private insurance industry outright, which is one reason Medicare for All is likely to divide the new majority in Congress.Price transparency rules have required hospitals to post their prices since 2021, and compliance is improving but incomplete. An advocacy group’s September review of 2,000 hospitals found 49.4 percent fully compliant, its highest level yet and up from 21.1 percent in its previous report, as federal fines reached 28 hospitals.The Wisconsin Hospital Association has called the report flawed. Patients, by and large, still don’t shop around, the group says, and many hospitals post percentages and formulas rather than real dollar prices.The White House has not ignored the issue, though its focus has been narrower. Since last September, President Trump has announced “most-favored-nation” pricing deals with 26 drugmakers covering 89 percent of the branded drug market, according to the White House. In February his administration launched TrumpRx.gov, a site offering cash discounts on dozens of brand-name drugs. The White House says patients have saved more than $700 million through it.Independent analyses are less impressive. A month after launch, the Center for American Progress found that of the 54 drugs listed, exactly one was available at a genuinely new lower price. Seventeen cost more than generic equivalents, 20 were comparably priced or cheaper on GoodRx, and 16 were already available at the same or a lower price through manufacturer coupons or assistance programs.Congress’s own Joint Economic Committee ran its own comparison against GoodRx and reached the same conclusion. Because TrumpRx excludes generics, families who use it for several common drugs would often pay hundreds of dollars more than if they’d asked their pharmacist for the generic version.Moreover, the site can’t fully reach the population it claims to serve. The analysis, applying KFF data on how often uninsured adults actually see a doctor, found roughly 13 million uninsured Americans likely never get as far as a prescription in the first place.Independent health policy researchers aren’t convinced the savings will add up, either. KFF and others point out that most Americans already have prescription coverage, so the discounts mainly help the uninsured or people paying cash. People with insurance will often pay less out of pocket than TrumpRx’s discounted list prices.Beyond that, the deals do not address hospital and physician bills, which researchers say drive a bigger share of the overall spending gap than drug prices ever have.Democrats now have the power to haul those programs, and the people who run them, before congressional committees. Whether they move beyond restoring the expired subsidies, and whether Mr. Jeffries can hold together a caucus that now includes Medicare for All senators, will say as much about the country’s priorities as any hearing on the Hill.Mr. Cannon has long argued that costs will keep climbing until enough voters get angry enough at the ballot box to force lawmakers to change course. On November 3, many of them did.“To quote Jackie Robinson, ‘higher and higher,’” he says. “Congress’ mistakes will keep punishing voters until voters start punishing Congress’ mistakes.”

America Pays Twice What Other Rich Nations Do for Health Care. Can Democrats Fix That?

America Pays Twice What Other Rich Nations Do for Health Care. Can Democrats Fix That?

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