The Vexing Problem of Access to Health Care in America: Is Employer-Based Health Insurance the Real Culprit?

As a country without universal access to health care, the United States struggles with ways to provide access to care. The United States is the only high-income country that does not guarantee health coverage and concomitantly it has worse outcomes on many measures. ^{1, 2} An article in this issue of Family Medicine discusses a student-run free clinic, an access-to-care strategy based on voluntarism. ³ The use of student-run free clinics is a limited fix to the bigger problem of health care access in the United States. ⁴ Another strategy based on voluntarism is to provide care via physician volunteers. ⁵ According to the National Association of Free and Charitable Clinics (NAFC), in 2022, physician volunteers helped 1.7 million patients through 5.8 million patient visits. ⁵ Importantly, the majority of the patients at these charitable clinics are employed. ⁶ One study showed that 34% had full-time employment but no benefits. ⁷

The US health system is built on the bedrock of employer-based health insurance. This is a structural flaw for guaranteeing health care access. The data from free clinics show that a health system built on employer-based health insurance is insufficient for access. Perhaps this structural flaw of employer-based health insurance is the root cause we need to address.

The Affordable Care Act (ACA), also known as Obamacare, was meant to address health care access.⁸ The ACA focused on expanded Medicaid eligibility but a key was to provide tax breaks and expectations to businesses to offer health insurance to employees. The ACA does not require businesses to provide health benefits to their workers, but large employers may face financial penalties from the government if they don’t offer health insurance. The ACA encouraged employer-based health insurance.

Although many individuals who hadn’t had health insurance were covered by the ACA there were still millions who weren’t covered, so at best it could be seen as a partial success.⁹ In 2022, 8 years after the final implementation of the program, there were still 25.6 million uninsured nonelderly individuals. At the same time, some 2024 US presidential candidates have been proposing to eliminate the ACA, which would result in millions more without insurance. Yet these candidates have not provided specifics on what would replace the Affordable Care Act and how we would provide health care access to the population. ^{10, 11}

Most nonelderly people in the United States who have health insurance receive it as a benefit from their employer. Most everyone reading this article will have employer-based health insurance and will assume that all employers offer health insurance. Yet, only slightly more than 50% of the US population (54.5%) has employer-based health insurance. ¹² Moreover, most employers do not provide health insurance.¹³ A survey in 2022 by the Kaiser Family Foundation found that in the United States, less than half of private sector businesses (48%) offer health insurance to employees. It is important to note that the ACA does not require small businesses (fewer than 50 full time employees) to offer it. In addition, the “gig” economy that has flourished in recent few years has created a drop in employer-based health insurance for many people.¹⁴ In other words, in a system built on employer-based health insurance, people who have jobs are considered to be the ones who have access to care, but in fact many of them have very limited access to health care.

The United States is relatively uncommon as a nation in dealing with health care access through employer-based health insurance. It is important to remember that the current health care system was not based on an intentional, well-thought-out strategy, but rather was an historical accident. It was essentially an unintended consequence of wage freezes during World War II. ¹⁵ Since there was a labor shortage with so many people in the armed forces at the time and employers couldn’t recruit good workers by offering more money, employers sweetened the deal for workers by adding health insurance as a benefit to the job. This unintended consequence of wage freezes created a health care access system based on employer-based health insurance that has persisted for 80 years and has come to define the US health care experience. Ours is a system that clearly leaves many, particularly those with low income, unemployed, underemployed, and even fully-employed individuals with discontinuous and fragmented health care.

With the continued lack of access for millions in the United States, statements about how the nation has the best health system in the world ring hollow. When President Obama was trying to create the ACA, he reportedly commented that if he were starting from scratch he would create a system where the government provides insurance, rather than building it on employer-based insurance.¹⁶ But he wasn’t building a system from scratch and there was significant inertia, and many financial losers to moving from a system built around employer-based health insurance. As was mentioned above, the ACA, being built upon the existing system, still doesn’t meet the goal of ensuring access for everyone.

Revisiting some data clearly reminds us that the existing system doesn’t work and we need to conceptualize health care access in a new system. Fewer than half of private companies offer health insurance, only 54% of the population have employer-based health insurance, 52% of patients at charitable clinics are employed, and millions of people are without insurance. Disruption and a planned strategy seem necessary to move to a system that provides universal access to the US population. Voluntarism and provision of free care is a laudable backfill to meet the deficiencies of the current environment, but a new, more resilient and sustainable system needs to be the top priority in health policy discussions.

A potential strategy for health care access that has worked in other high-income countries is based on having the government provide universal health care through tax revenue with additional coverage provided through supplemental private insurance. This is a system used in Australia, Brazil, Germany, England, Japan, and other countries.¹ Private insurance helps to pay for choice in providers, more rapid access, and some out-of-pocket costs. In fact, in the United States, Medicare Supplement Insurance (Medigap), built upon the universal access program of Medicare, functions similarly. ¹⁷ Consequently, such a system already exists in the United States and so would not be seen as unusual, threatening, or foreign. Importantly, such a system also obviates the need for employer-based health insurance, a factor which may provide comfort for those wary of change.

The purpose of this editorial is not to define exactly what the new system should look like but rather to help US policy makers understand that Band-aids and backfills to the inherent weaknesses in our current system are unsustainable and insufficient to care for the health of the population. The system requires disruptive change. Eighty years is long enough to see that something different is required. The hope is that some intelligent, virtuous leaders will move us toward a better, healthier future.