Opinion: American Healthcare Remains Overpriced

America's health care system stands in stark contrast to other wealthy nations, primarily due to its complexity and exorbitant costs. Despite spending an astounding 17% of the country's gross domestic product on health care—half as much again as in similar countries—it still leaves approximately 26 million people without coverage. While the Affordable Care Act (ACA) of 2010 made some improvements, it failed to address two pivotal issues: high costs and less-than-universal access.

Part of the ACA's shortfall was due to legislators abandoning the public option concept, a government-run plan designed to compete with private insurance. This idea should be revisited despite Washington’s dysfunction, making such innovation challenging at a federal level. States have been experimenting with different variants that are worth observing.

Despite most Americans being insured through their employers, the enormous cost of healthcare is often disguised by suppressed wages resulting from premiums. Even those covered can face additional charges hefty enough to buy a small car in some cases. The fear among workers is that job loss equates to losing their insurance too.

Over half of those who signed up for Obamacare complained about high monthly outlays and substantial out-of-pocket expenses. Moreover, around 10% of Americans remain uninsured despite ACA efforts.

The vision for Obamacare included a public option that would save money by negotiating prices and reducing costs akin to Medicare but faced severe industry resistance, ultimately, ultimately leading to its scrapping.

However, this idea has seen somewhat of a resurrection at the state level, largely due to the ACA enabling 'innovative strategies' aimed at lowering costs and broadening coverage scope across three states so far,, while others have plans underway.

Colorado’s scheme stands out particularly because it offers free primary care alongside mental-health services coupled with lower premiums compared against many marketplace plans, resulting in widespread popularity within the state population.

Yet these schemes deviate significantly from traditional public-option approaches relying on gradual expansion via competition like Medicare rather than price controls—an approach that still holds some merit. The old-school public option could use Medicare’s systems to gradually extend affordable coverage with premiums set to recover full actuarial costs, offset by ACA subsidies for eligible households.

Such proposals do not aim to replace private insurance or regulate it more tightly state-by-state but rather provide broader access to affordable options. However, they will inevitably face challenges as health-care reform is a politically fraught and administratively demanding task.

Without rules compelling participation, hospitals and providers may refuse patients if reimbursement rates fall too low, potentially creating areas of weak competition and less coverage. Despite these potential setbacks, the current system's failure cannot be ignored: rising healthcare costs consistently top American's lists of concerns in various polls.

States should continue exploring new approaches,,,, while Washington should reconsider the Medicare-based public option—the most promising solution for addressing the system's biggest issues.