Neo Institute Europa

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In 2024, 26.7 million US citizens aged 0 to 64 were uninsured, roughly 9.8% of the under-65 population, an increase of more than 1.3 million since 2019. The COVID-19 pandemic saw the federal government mandate continuous enrolment in Medicaid, a state-administered coverage programme for low-income Americans. Simultaneously, the Affordable Care Act (ACA), a 2010 reform that created subsidised insurance marketplaces, received enhanced subsidies to help people navigate the crisis. But 2023 saw the end of the federally mandated continuous Medicaid enrolment. The enhanced ACA subsidies then expired at the end of 2025, after Congress failed to renew them despite a 43-day government shutdown over the issue.

Then, in July 2025, the United States Congress passed the One Big Beautiful Bill Act (OBBBA), which imposed stricter work requirements and eligibility checks on Medicaid and tightened eligibility verification for the ACA Marketplaces. The Congressional Budget Office projects that by 2034, an additional 14 million Americans will become uninsured because of these combined changes. By contrast, the most recent EU-wide estimate, from the late 2010s, put the number of uninsured Europeans at around seven million, across a population roughly a third larger than that of the US. Even allowing for the dated figures, the discrepancy is enormous. The US also has consistently worse healthcare outcomes than similarly developed nations, despite spending nearly twice as much per capita. This raises a question: Why? The answer lies in how the US system was built.

The first true modern healthcare system emerged in the 1880s in the newly unified Germany when Otto von Bismarck developed a comprehensive statutory health insurance system for workers and their families. Known as the Bismarck model, this system worked by financing healthcare through employers and employee payroll deductions. These funds would then go to non-profit sickness funds which would pay for the medical services utilised by employees and their families. Today, variations of this system exist in countries all over the world, including many in Europe, like Germany, France, Belgium and Switzerland.

Another popular healthcare framework appeared during the Second World War when the British wartime coalition government commissioned William Beveridge, a prominent liberal economist, to develop a post-war social reconstruction programme. This culminated in the passing of the National Health Service (NHS) Act of 1948 which laid out a healthcare system that was fully funded by taxes and free at the point of service. This framework, known as the Beveridge model, is still used in the UK, with variations existing in Scandinavia, Spain and Italy. Today, both the Bismarck and Beveridge systems serve as the primary models for the universal healthcare systems across Europe, allowing European countries to consistently top global rankings for health. The United States, however, took a different approach.

Efforts to pass some sort of national health insurance plan in the United States date back to the 1910s. However, these plans never gained traction in Congress. By the 1920s the American Medical Association (AMA), a professional association and lobbying group for physicians, began a decades-long trend of strongly opposing healthcare legislation. This opposition mostly came from claims that healthcare plans would negatively impact the physician-patient relationship and physician salaries as well as encourage socialism. The US therefore developed a much more fragmented healthcare system.

The first major subscription-based private insurance plans in the US came about during the Great Depression. Because of opposition from the AMA, these early schemes initially covered hospital services only, but similar models quickly spread nationwide. They developed into voluntary, employer-sponsored, community-based non-profit arrangements that came to be known as Blue Cross plans. Plans covering physician services soon followed under the Blue Shield label, which the AMA eventually tolerated as opinions shifted away from outright opposition to healthcare plans amid fears of healthcare nationalisation. Over time these systems merged and Blue Cross Blue Shield exists to this day as a major US employer-based insurer but has since converted to a for-profit model.

Alongside this model, other forms of healthcare also developed. Notably, in 1929 a group of Los Angeles physicians was blacklisted from local hospitals for offering subscription-based plans to their patients. In response, they secured private medical facilities to provide direct service to their plan members, giving rise to what would later become the Health Maintenance Organisation (HMO). Then, by the 1950s, commercial plans began to gain traction because of expanding employer coverage and union bargaining. Offering more flexible pricing structures with lower premiums, these plans outcompeted the earlier community-based systems.

Yet, despite these developments, significant gaps in coverage remained, particularly among retirees and low-income groups. This led to the creation of Medicare and Medicaid in 1965. Medicare established public insurance for those aged 65 and older, later extending to cover certain disabled individuals under 65. Like Blue Cross Blue Shield, it separated hospital and physician coverage. In Medicare, these became Parts A and B. Medicaid targeted low-income populations, had no such distinctions and was funded jointly by federal and state governments. Critically, both programmes were structured as supplements to, rather than replacements for, the existing private insurance market.

From the 1970s onward, repeated efforts to enact broader national health reform failed, while deregulation enabled large employers to establish their own health insurance plans. Over time, HMOs and related models, collectively known as managed care, became increasingly common. The 1990s then saw the passing of the Children’s Health Insurance Programme (CHIP), which helped states extend coverage to low- and moderate-income children. The next major expansion of US healthcare policy occurred in 2010 with the passage of the Affordable Care Act. The ACA succeeded in extending subsidies and expanding public eligibility. However, it continues to operate within a framework dominated by private insurance. As a result, coverage initially improved, but the system’s basic structure remained largely unchanged, leaving it vulnerable to the legislative reversals seen today.

The current US healthcare system is highly intricate and composed of several different systems, ranging from public to private and commercial to non-profit. 66% of Americans use private insurance, which is usually sponsored by employers. Spouses, children up until the age of 26 and other dependents can be added for an additional cost. Plans purchased through ACA marketplaces are another common source of private insurance plans. Mainly offering managed care plans, these plans usually limit subscribers to a specific network of providers, but variations exist.

By contrast, public healthcare programmes are reserved only for specific groups of individuals. In addition to Medicare, Medicaid and CHIP, these programmes include the Indian Health Service and the Veterans Health Administration. However, the latter are not health insurance plans, but rather, federal healthcare programmes that only administer healthcare to recognised Native Americans and US veterans respectively. Medicare in its current form has had minimal changes since its inception in the 1960s. Part C, the option to purchase Medicare plans through private providers, was added in 1997, while a Part D drug plan was implemented in 2006. The Part B plan requires monthly premiums which are currently at $202.90 for individuals earning $109,000 or less annually. Part A is funded through employee payroll deductions. Medicaid, on the other hand, remains virtually unchanged and currently covers around 17% of the population. Eligibility and coverage, however, vary by state due to Supreme Court rulings against Medicaid expansion.

Payments are rendered in a variety of ways. Physicians are often paid based on fee-for-service, while hospitals usually receive bundled payments for groups of patients with similar diagnoses. Private insurance companies often negotiate payment rates for medical services. As a result, Americans face a complex web of healthcare costs, including copays, coinsurance and deductibles. Those without insurance bear the full cost of care themselves. This complexity has produced a system that is extraordinarily expensive, deeply inequitable and extremely inefficient. For instance, in 2024 the US spent about $14,885 per person on healthcare, by far the most when compared to similarly wealthy countries. A significant driver of these high healthcare costs is administrative upkeep, with the US spending an average of $1076 per capita on administrative costs alone. As a result, the average doctor visit in the United States costs $368. However, even with insurance, many Americans struggle with healthcare costs. Nearly 43% of Americans with employer coverage report difficulty in affording healthcare and nearly one-third of working-age adults have gone into medical debt. Yet, healthcare outcomes are consistently worse than in Europe. Life expectancy stands at 79, almost four years below the OECD average, with higher rates of preventable deaths, infant and maternal mortality, obesity and chronic illness.

On the other hand, in Europe, France offers a markedly different picture. Based on a Bismarckian model with influences from the Beveridge model, France has a Social Health Insurance (SHI) system, with near-universal coverage since 1999. Even undocumented migrants and foreigners are covered in certain cases. The system broadly covers GPs, specialists and both public and private hospitals. A national Ministry of Health oversees the system, while regional agencies administer it. It is financed through payroll and income taxes, national budget funds and alcohol and tobacco industry levies. Patients pay upfront but are later reimbursed by the SHI, leaving only small copays and coinsurance. The average doctor’s consultation costs around €30. Voluntary employer-based supplemental private insurance exists for services not covered by the SHI.

Nonetheless, France’s healthcare system is not perfect. Notably, around 6% of those in the lowest income groups cannot afford healthcare. France has also faced recent staffing shortages, with nearly half of doctors nearing retirement, about 40% of nurses considering leaving and frequent protest-related absences. Finally, a key concern for French healthcare is so-called “medical deserts” or parts of France that are disproportionately underserved by the healthcare system. An estimated 9 million people live in such areas. In 2025, the French National Assembly passed the Garot Law to try to address this, requiring new doctors to get regional approval before opening practices in well-served areas. This triggered nationwide strikes by doctors’ unions and medical students. Even so, France’s system appears more effective than that of the  US, with stronger health outcomes. Though, not all of Europe’s universal healthcare systems function as smoothly.

Poland, like France, also uses a Bismarckian-type social health insurance model, covering about 97% of the population. The system is highly centralised within the National Ministry of Health, but regional governments retain planning responsibilities. Most hospitals are regionally owned and may be public or private, while most primary and outpatient specialist care is privately owned. The Narodowy Fundusz Zdrowia (NFZ) is the sole payer of the system. Employee payroll taxes are the main funding mechanism. Primary care, outpatient care and hospital services are free. Private voluntary health insurance is also available.

Yet, the Polish system struggles in ways the French one does not, with projections of a healthcare funding gap reaching up to 216.5 billion PLN from 2025 to 2028. This has been further compounded by an April 2025 government decision to cut health contributions for around 2.5 million self-employed workers, reducing NFZ revenue by an estimated PLN 4.6 billion annually. Public healthcare spending is also low, with only 6.7% of GDP going to healthcare compared to an 8.5% EU average. The consequences of all this are visible, with patients waiting an average of 4.2 months to get medical care and considerably longer for specialists. As a result, Polish patients increasingly pay out of pocket for private care with around 51% of Poles relying on both public and private healthcare services. Poland’s doctor and nurse ratios are also below the EU average at 3.9 and 5.9 per 1,000 inhabitants respectively. These pressures have created worse healthcare outcomes than European peers, with life expectancy at around 79. Poland also has higher rates of preventable deaths. Poland demonstrates that even a universal healthcare system can falter, if not properly financed, staffed and governed.

The US healthcare system faces deep structural problems. Its complex mix of mostly for-profit private coverage and limited public programmes has produced an inefficient system with excessive administrative costs and left nearly 10% of Americans without healthcare coverage. Current political developments, such as OBBBA, are likely to worsen these problems. Across the Atlantic, Europe’s universal healthcare systems generally perform better, though important caveats remain, as Poland’s struggles show. Even France’s stronger system has its own weaknesses, while Poland’s strained system is still far less fragmented than that of the United States. Ultimately, it will be up to future generations of Europeans to defend their universal healthcare systems, while future generations of Americans must push for reforms to repair a broken system that is deeply ingrained.