How Profit and Politics Have Shaped US Healthcare's High Costs and Inequities

The U.S. healthcare system is often criticized for its exorbitant costs, complex structure, and persistent disparities. But these issues are not accidental failures—they are the result of a system intentionally built to prioritize private profits, political interests, and societal hierarchies. As a public health historian, I have examined how historical policy decisions have embedded these features into the fabric of American healthcare.

A common misconception suggests that the system's dysfunction is a flaw to be fixed. Instead, it operates as designed, serving specific agendas that perpetuate inequality. For example, employer-based insurance emerged during World War II due to tax policies that incentivized corporations to provide benefits, effectively tying health access to employment status—a model that many other nations have moved beyond.

The expansion of Medicare and Medicaid in 1965 further entrenched disparities. While these programs increased access, they also reinforced existing racial and socio-economic inequalities, especially because Medicaid's scope varies widely across states due to political opposition. States in the South, often with large Black populations, chose not to expand Medicaid, leaving millions uninsured.

The legacy of decentralization and resistance to national solutions perpetuates gaps in coverage, particularly in rural areas, where hospital closures and provider shortages are common. Disinvestment in public health infrastructure and underfunded local health departments exacerbate vulnerabilities, as seen during the COVID-19 pandemic, which showcased the fragility of the system—especially among low-income and rural populations.

Furthermore, administrative complexity benefits insurers and intermediaries while burdening patients, especially the uninsured and underinsured. The proliferation of opaque billing, confusing networks, and diverse formularies creates a profitable maze that most cannot navigate. Politically, efforts to adopt universal, publicly funded healthcare have faced fierce opposition, often fueled by fears of socialism and threats to individual freedoms.

Even reforms like the Affordable Care Act did little to dismantle the foundational issues. It expanded coverage but preserved the private insurance dominance and affordability gaps. The refusal of some states to expand Medicaid has left millions without coverage, with significant racial and regional disparities.

Understanding that these structural features were intentionally embedded helps explain why reform has been so difficult. To move toward a more equitable healthcare system, the focus must shift from fixing failures to addressing the deliberately designed inequalities, learning from countries that prioritize universal access and transparency.

In conclusion, recognizing that the U.S. healthcare system was shaped for profit and political ends is crucial for meaningful reform. Only by confronting these roots can Americans demand a system that truly serves the health of all, rather than the interests of a few.