The reaction across social media was not outrage. It was celebration.
T-shirts appeared within hours. Memes spread by the millions. Comment sections filled with variations of “he had it coming.” A man who ran a company that paid out $22 billion in insurance claims in 2023[1] was cheered as a villain by people who had, in many cases, benefited from that very coverage.
I want to sit with that for a moment — not the violence, but what the reaction revealed.
Because that reaction tells you more about the American healthcare crisis than any policy paper or congressional hearing I have ever seen.
We have built, over 70 years — through a series of accidents and incentives I described in the companion piece to this one — one of the most extensive healthcare coverage systems in history. More Americans are covered than at any point in our nation’s existence. Patients pay proportionally less out of pocket for the care they receive than at any time since cash medicine dominated in the 1950s. Our cancer survival rates lead the world. The drugs that every socialized healthcare system in Europe distributes were largely invented here, funded by American private capital.
And we are angrier about healthcare than almost any other issue in national life.
That disconnect is not an accident. It was built — slowly, quietly, over decades — by the same mechanism that produced the coverage itself. And until we’re honest about it, no reform will fix anything.
What You Pay vs. What You Get
In 1950, Americans paid 65 cents of every healthcare dollar themselves. Today they pay 11 cents.[2] The care they receive is incomparably better and incomparably more extensive. A routine cancer treatment today would have been a miraculous intervention in 1952 — if it existed at all.
But here is what changed psychologically, not just financially: when you pay 11 cents of every dollar, you stop thinking of healthcare as something that costs money. You start thinking of it as something you are owed.
This is not a moral failure. It is a completely predictable response to an incentive structure. Economists call it moral hazard — the well-documented tendency for people to consume more of something when they are insulated from its cost. The buffet table effect: when everything is available for one fixed price, people take more than they need, try things they would not pay for individually, and still often feel the service was inadequate. Not because they are irresponsible. Because the price signal says it costs nothing extra.
American healthcare has become the most expensive buffet in human history. And most of the people eating at it have no idea what the food actually costs.
$10 an Hour You Never See
Before we get to the philosophy, let’s make the invisible visible with one number.
The average employer family health plan costs $20,143 per year — paid entirely by the employer, never appearing on a pay stub.[5] Divide that by 2,080 working hours and you get $9.69 per hour — essentially $10 of every hour worked, flowing silently from employer to insurance company before the worker ever sees a cent of their wages.
For workers at the lower end of the wage scale, this hidden cost is not an abstraction. It is a defining feature of their economic reality — one they have never been shown.
This is the fact that makes the entitlement argument most concrete. The worker making $15/hour who believes healthcare should be free is already costing their employer $10/hour in invisible healthcare costs. It has never been free. They just never saw the bill.
Under What Theory, Exactly?
Before we get to the mechanics, I want to ask a question that nobody in politics will ask directly:
Under what coherent theory does any person have a birthright entitlement — from the moment they are born until the day they die — to have someone else primarily pay for their medical care, in unlimited quantity, at minimal personal cost?
I am not asking whether we should help people who cannot afford care. We should, and the Medicaid model — targeted support for those genuinely unable to pay — is a defensible answer to that question. I am asking something different: why has the American expectation become that everyone, regardless of means, is entitled to comprehensive medical services at close to zero personal cost, on demand, for a lifetime?
Consider the comparison. In no other essential domain of life do we operate on this principle. Housing is a fundamental human need — more fundamental than a specialist consultation, arguably. We do not assume that someone else should pay for your housing from birth to death, in whatever quantity you choose to consume, with no cost signal to moderate demand. The same is true for food, clothing, transportation, education beyond a base level. These are necessities. We accept that they cost money. We accept that how much you consume affects how much you pay.
Healthcare acquired its special status through a specific historical accident: employer insurance was framed as a benefit rather than wages. When your employer pays $20,143 of your family’s health premium, that money does not come from a charitable pool — it comes from your compensation. It is wages you earned that were redirected, invisibly, to the healthcare system before you ever saw them. But because you never saw them, you never felt ownership of the decision. The benefit felt like a gift. And gifts feel like entitlements.
Once Medicare and Medicaid extended the same logic to retirees and the poor, the philosophical frame was complete: healthcare is something the collective owes you, unconditionally, for life. The cost is someone else’s problem. The quantity is your call.
No functioning economic system has ever made that work at scale. And ours isn’t working either — it’s just that the evidence of failure (18% of GDP, $5.3 trillion per year, providers who have no price list) is spread across so many invisible payment mechanisms that most people never connect the cost to the consumption.
Three Mechanisms Nobody Talks About Honestly
The cost problem in American healthcare — $5.3 trillion per year, 18% of GDP,[3] highest per-capita spending in the world by a wide margin — has three structural causes that almost no political conversation will address directly.
Milton Friedman identified this precisely, decades ago. True insurance is for catastrophic, unpredictable events. You don’t use car insurance to buy gasoline. Somewhere between the 1950s and today, American health “insurance” transformed from catastrophic protection into prepaid consumption of routine care. The employer plan, the deductible, the copay — these are not insurance mechanisms. They are cost-sharing arrangements for consumption that was always going to happen regardless of cost. That transformation is a significant reason healthcare has gone from 5% to 18% of GDP.
The Fix Nobody Will Propose: Make Cost Visible
If the problem is that consumers feel no cost and therefore have no price signal, the solution is not complicated in theory — even if it is politically nearly impossible.
Make the cost visible. Give the consumer skin in the game.
The employer premium should be treated as what it actually is: wages. If every worker received the full $26,993 as income and used it to purchase their own coverage — catastrophic insurance for genuinely ruinous events, their own money for routine care — the entire market structure changes. Suddenly the person consuming the care is also the person paying for it, at a ratio that actually registers. Not $1 to $8.09. Something closer to $1 to $1.
We have a small-scale version of this model already: Health Savings Accounts paired with high-deductible plans. The research is consistent. HSA enrollees shop for price. They ask what procedures cost before scheduling. They skip unnecessary visits. They negotiate. And — critically — when consumers start comparing prices, providers start competing on them.
California’s public employee pension system told workers: “We’ll pay a fixed amount for hip and knee replacements. You pay anything above that.” Hospital prices for those procedures fell 20–34% within two years. Quality did not decline. Outcomes did not worsen. The only thing that changed was that consumers had skin in the game — and providers responded to that signal immediately. The market mechanism works in healthcare. It just needs to be allowed to function.
Singapore has run the consumer-directed model for 40 years. Their system — mandatory personal medical savings accounts for routine care, government-backed catastrophic coverage for major illness — costs roughly 4.9% of GDP[7] while delivering outcomes that compete with any developed nation. Compare that to the US at 18% of GDP. The difference is not the quality of care. It is whether the consumer feels the cost of the routine transaction.
Transparent pricing is the other half. Today, most hospitals cannot tell you what a procedure will cost before you have it. This is not an accident. It is a structural feature that protects every high-cost incumbent from price competition. Executive orders have pushed price transparency mandates. Hospitals have resisted, litigated, and dragged their feet. Because transparent prices would allow consumers to compare — and comparison creates competition. Competition creates lower prices. Lower prices reduce revenue. Every stakeholder in the current system has an incentive to prevent that outcome.
The Entitlement Narrative: How We Got Here
The shift from “insurance against catastrophe” to “prepaid consumption I’m entitled to” was not spontaneous. It was taught.
Decades of employer benefit communications told workers their healthcare was “fully covered” — without mentioning the $20,143 in employer-paid premiums sitting invisibly inside their compensation package.[5] Politicians of both parties promised healthcare as a right — without explaining that rights don’t eliminate costs, they only redistribute who pays them. The Affordable Care Act extended the logic further: everyone is entitled to comprehensive coverage, with subsidies to make it feel affordable, while the underlying price continued to rise unchecked.
The result is a population that experiences healthcare as something they are owed, feels rage when anyone says no to any part of it, and has no working mental model of what it actually costs — because for most of their lives, the cost has been invisible.
The insurance company is visible. It says no. It sends the denial letter. It requires the prior authorization. That experience — being told no by a faceless institution — triggers exactly the kind of fury that produces the Luigi moment.
What is invisible is the mechanism that makes the “no” necessary in the first place: a system where neither buyers nor sellers face normal price discipline, where consumption has almost no marginal cost signal for the consumer, and where total spending has grown from 5% to 18% of GDP in six decades. Someone has to make resource allocation decisions when the consuming party feels no cost. Call it rationing, call it prior authorization, call it medical necessity review — it exists in every healthcare system on earth. In socialized systems, a government bureaucrat makes those decisions. In America, it’s an insurance company. Neither is the villain. Both are the arithmetic.
“Healthcare Should Be Free” — The Most Expensive Political Promise
When a politician campaigns on “healthcare should be free,” they are not making an economic argument. They are making a political calculation: that the voter who hears “free” will not ask what free means, who pays, and what it costs in non-monetary terms.
Nothing in healthcare is free. The only question is whether the cost is visible or hidden. Visible costs discipline behavior. Hidden costs discipline no one — and accumulate silently until the system buckles.
Every country that provides “free” healthcare rations it. They have to. Resources are finite. When the price signal is removed, another rationing mechanism takes its place. In the UK, it is wait times. In Canada, it is queue length. In every universal system, there is a bureaucratic gatekeeping layer that decides what gets covered, what doesn’t, and who waits how long. The UK National Health Service has 7.6 million people on waiting lists today.[8] Canada’s median wait for a specialist referral is 27 weeks.[9] That IS the price of free — paid in time and denied access instead of money.
When politicians promise free healthcare, they are promising to replace one rationing mechanism (price) with another (wait times + bureaucratic denial). The total cost of care does not decrease. The visibility of the cost decreases. And invisible costs don’t discipline consumption, don’t incentivize providers to compete, and don’t create pressure to innovate on efficiency. They just grow — until the government that promised “free” has a fiscal crisis and starts cutting what it covers.
How do you counter this argument when it has overwhelming political appeal? You probably can’t — not directly, not emotionally. “Free is good” is an argument that wins on feeling every time it’s made against a cost argument.
What you can do is make the actual cost visible. Show every American worker their full compensation statement — wages plus the $20,143 employer premium their employer spends on their behalf. Show them the Medicare payroll tax they and their employer have paid every year since their first job. Show them the federal and state taxes that fund Medicaid. Add it up. The “free” healthcare most Americans receive has cost them, directly and indirectly, well over $1 million across a working lifetime. It was never free. It was just billed in ways they couldn’t see.
The answer to “healthcare should be free” is not “healthcare should be expensive.” It is: healthcare has never been free — we’ve just been hiding the bill. And hiding the bill is why it keeps growing.
The Socialized Medicine Myth — A Direct Challenge
I want to address the argument directly that countries with fully socialized healthcare deliver better outcomes and prove a better model is possible.[11]
The evidence does not support it — at least not in the way the argument is usually made.
The most-cited metrics are life expectancy rankings and infant mortality. The United States ranks roughly 40th in life expectancy globally. Critics point to this as evidence of healthcare system failure. It is not. It is evidence of societal outcomes influenced by factors healthcare systems don’t control.
The US has a homicide rate four times the European average. We have an opioid death crisis that is essentially a uniquely American phenomenon driven by pharmaceutical marketing, regulatory failure, and cultural factors — not healthcare quality. We have more auto fatalities per capita. Remove those causes of death — none of which represent a failure of medical care — and US life expectancy becomes fully competitive with any peer nation. You cannot blame the healthcare system for deaths it did not cause and could not prevent.
Where healthcare quality actually shows up in data is cancer survival — patients who enter the system, receive a diagnosis, and get treated. Here, the comparison is not ambiguous.
| Cancer Type | 🇺🇸 United States | 🇬🇧 United Kingdom | 🇩🇪 Germany | 🇨🇦 Canada | Result |
|---|---|---|---|---|---|
| Breast Cancer (5-yr) | 90.2% | 86.6% | 86.2% | 88.4% | US #1 |
| Prostate Cancer (5-yr) | 97.4% | 88.0% | 92.1% | 94.1% | US #1 |
| Colorectal Cancer (5-yr) | 65.4% | 60.1% | 64.7% | 63.0% | US #1 |
| Melanoma (5-yr) | 92.3% | 87.9% | 91.4% | 90.6% | US #1 |
The drugs those socialized systems distribute were largely developed in the United States, funded by the private capital that the profit motive attracts. Approximately 45% of all new drugs are developed here.[10] The innovation pipeline that produces tomorrow’s treatments runs on American investment incentives. Socialize that away and you socialize the pipeline with it.
Socialized systems deliver adequate routine care efficiently and cheaply. They do not lead on serious illness outcomes, complex surgery, or medical innovation. If you have a cold, Canada is probably fine. If you have cancer, you want to be in America. That is not nationalism. It is the OECD data and the Lancet Oncology CONCORD study.
The Largest Payer Is Also the Loudest Voice Saying It’s Free
Here is the stat that reframes everything. From the CMS National Health Expenditure Accounts, 2024:
The government — federal, state, and local combined — pays 47 cents of every healthcare dollar in America.[13] It is, by a wide margin, the single largest payer in the system. And it is also the entity whose elected representatives campaign most loudly on the promise that healthcare should cost you nothing.
That is not a coincidence. It is a political feedback loop, and it is the most destructive force in American healthcare economics.
The loop works like this: Government expands entitlement and coverage → more people depend on government-paid care → those people vote for whoever promises to expand it further → government pays more → the entitlement expectation deepens → costs rise → government must pay still more. Repeat. The CMS projects the federal share of healthcare spending grows from 31% to 33% by 2034.[14] It has never moved the other direction in the modern era. It only goes one way.
Every time government expands coverage without a cost signal attached to it, it does not solve the affordability problem. It accelerates it. More coverage means more consumption. More consumption means higher costs. Higher costs mean bigger government bills. Bigger government bills create pressure to promise even more coverage to justify the spending. And the consumer — insulated from every step of this — consumes more, expects more, and blames the insurance company when anyone says no.
The private market cannot fix this while the dominant payer actively undermines the price mechanism. When 47% of all spending flows through institutions with no incentive to discipline cost — and every political incentive to expand it — the remaining 53% has no leverage to create the market behavior that would bring costs down.
Why Nothing Changes: The Political Economy of Inertia
Here is the honest reason the American healthcare cost problem persists: almost nobody with political power wants to solve it.
The only Americans truly harmed by the status quo — young, healthy workers who pay high premiums for coverage they rarely use, subsidizing a system that disproportionately benefits older, sicker, and wealthier participants — are the least organized political constituency in the country. They don’t vote in blocs. They don’t have a lobby. And the system’s defenders have a compelling emotional argument that drowns out economic reasoning every time: “Do you want sick people to go without care?”
The answer, obviously, is no. But that answer has nothing to do with the actual question, which is: why does the care cost what it does, and what would make it cost less? Those are different questions. And conflating them is the oldest trick in the American healthcare policy playbook.
The problem is not insurance companies. The CEOs of health insurance companies are not villains. They are administrators of a system that was structurally designed to produce exactly these outcomes: unlimited consumption demand, third-party payment, no price discipline, and explosive cost growth.
The system was not designed by villains. It accumulated through a series of accidents and incentives over 70 years. Fixing it will require something harder than anger at a visible target. It will require an honest conversation that almost nobody in politics is currently willing to have.
The arc of American healthcare is genuinely one of the great progress stories of the 20th century. 92% coverage. World-leading survival rates. Protection against financial catastrophe that generations of Americans before us never had.
The arc of American healthcare costs is a crisis of our own making — built on entitlement, insulated from price signals, and defended by every stakeholder who benefits from keeping it exactly as it is.
Both things are true. Only one of them gets talked about.