The recent resolution of the longest government shutdown in U.S. history has merely paused a bitter political fight over Obamacare subsidies, highlighting a deeper, systemic crisis in American health care delivery. The temporary truce, which saw eight Democrats agree to postpone the issue to pass a funding bill, is unlikely to hold, setting the stage for more political rancor.
The Staggering Cost of American Care
While the political battles focus on the Affordable Care Act, which covers roughly 7% of Americans, the underlying problem is a fundamentally broken and exorbitantly expensive system. Data from the Petersen-KFF Health Care Tracker paints a stark picture: the United States spends far more on health care than any other high-income nation.
In 2023, per capita health care spending in the U.S. reached $13,432. This dwarfs the average of $7,393 across a dozen comparable countries, including Switzerland, Germany, the United Kingdom, France, and Japan.
The financial burden has grown dramatically over decades. U.S. health care expenditures as a percentage of Gross Domestic Product (GDP) ballooned from 6.9% in 1970 to 17.6% in 2023, representing an increase of 155%. Economist Mark Perry notes that from January 2000 to December 2024, while overall U.S. inflation rose 87.3%, the cost of hospital services skyrocketed by 256% and medical care services by 138.6%.
A System Isolated from Market Forces
This hyperinflation in medical costs stands in shocking contrast to other sectors of the economy. Over the same period, clothing costs rose a mere 1%, cellphone service prices fell 41.7%, and computer software costs dropped 74.2%. These latter items operate in competitive, transparent markets—a dynamic largely absent from health care.
The problem is exacerbated by a lack of price transparency. As columnist Star Parker points out, patients and doctors often have no idea what a recommended test or procedure will cost, eliminating any possibility of shopping for value. In 2023, nearly half of all health care spending was conducted by federal, state, and local governments, further distancing the system from consumer-driven market pressures.
Prescribing a Free-Market Cure
Parker, founder of the Center for Urban Renewal and Education, argues that endless debates over Obamacare, Medicaid, and Medicare miss the core issue. She advocates for a fundamental shift toward market-based solutions that introduce competition and price transparency.
One proposed remedy is the expansion of Health Savings Accounts (HSAs), an idea floated by former President Donald Trump and others. Under this model, individuals and their employers fund tax-free accounts for routine medical expenses, while high-deductible insurance plans cover major, catastrophic events. Parker contends that modern health insurance is misused, covering routine expenditures rather than acting as true insurance for extraordinary needs, which drives up costs.
Another alternative gaining attention is health-sharing plans. These are typically faith-based community arrangements where members pay monthly dues into a shared fund used to cover medical claims. While not insurance, they function similarly for major costs and are exempt from Obamacare regulations.
The central thesis is clear: America's health-care system is sick, and the diagnosed disease is an overabundance of government intervention. The prescribed cure is a return to the core principles that have historically driven American prosperity: free markets, competition, and the innovation of free people.