Healthcare reform refers to sustained, fundamental changes to how a country’s health system is financed, organized, and delivered. In the United States, it centers on three persistent challenges: millions of people lack affordable coverage, the country spends far more than any comparable nation, and health outcomes don’t reflect that spending. The U.S. spent $5.3 trillion on healthcare in 2024, or 18% of its entire GDP, roughly $15,474 per person.
Why the U.S. System Drives Reform Efforts
The gap between what Americans pay for healthcare and what they get in return is the core driver of reform. As far back as 1990, the U.S. was already spending $2,566 per person on health, more than double the average among industrialized nations. Yet life expectancy for American men was 72.0 years, compared to 72.7 in France, and infant mortality was higher than in Canada or France, both of which spent considerably less.
That gap has only widened. The share of the economy consumed by healthcare grew from 9.2% in 1980 to 18% in 2024. No other wealthy country comes close. For employers, the cost is tangible: small businesses paid an average of $1,232.59 per month toward family health coverage in early 2024, and workers shoulder a growing share on top of that through deductibles and copays. Reform efforts exist because these trends are unsustainable for families, businesses, and government budgets alike.
The Three Goals of Reform
Nearly every reform proposal, regardless of political origin, targets some combination of three goals: expanding access so fewer people are uninsured, controlling costs so healthcare doesn’t consume an ever-larger share of income, and improving quality so spending translates into better health. The tension between these goals is real. Expanding coverage often costs money in the short term, even when it promises savings later. Cutting costs can reduce the services people receive. Most reform debates are really arguments about which of these three priorities should come first and who should bear the trade-offs.
The Affordable Care Act
The most sweeping U.S. reform in decades, the Affordable Care Act (ACA) became law in March 2010. It attacked all three goals simultaneously. To expand access, it created online insurance marketplaces where individuals could shop for coverage with income-based subsidies. It also expanded Medicaid to cover adults earning below 138% of the federal poverty level, though not all states adopted the expansion.
To improve affordability, the law required insurers to cover people with preexisting conditions and let young adults stay on a parent’s plan until age 26. It also invested in new care delivery models designed to lower costs over time. The ACA didn’t create a universal system, but it significantly reduced the number of uninsured Americans and remains the structural backbone of the individual insurance market.
How Providers Get Paid Matters
One of the quieter but most consequential areas of reform involves changing how doctors and hospitals are paid. The traditional model, fee-for-service, pays providers for each test, visit, or procedure they perform. This rewards volume: the more you do, the more you earn, regardless of whether patients actually get healthier.
Value-based payment flips this incentive. Instead of paying per service, it ties reimbursement to outcomes. Did the patient’s condition improve? Were unnecessary hospital readmissions avoided? Providers who hit quality targets and keep costs below a benchmark share in the savings. Those who don’t may bear some financial risk.
Accountable care organizations, or ACOs, are the most prominent example. These are groups of doctors and hospitals that jointly take responsibility for the total cost and quality of care for a defined group of patients. The results have been meaningful but uneven. The ACO program delivered $4.3 billion in Medicare savings in 2022 and over $21 billion since it began. Analysis suggests the average ACO could still reduce operating expenses by about 10.5% and cut roughly $1,000 per patient annually without compromising quality. The biggest room for improvement is in care coordination and patient safety, where quality scores could rise by about 7 percentage points on average.
Single-Payer, Multi-Payer, and the Public Option
Reform debates often circle back to the fundamental question of who should pay for healthcare. The U.S. uses a multi-payer system: a patchwork of private insurers, employer plans, Medicare, Medicaid, and the VA. Other countries take different approaches, and the differences matter.
A single-payer system puts one entity, usually the government, in charge of paying for care. This model performs better at pooling risk across the whole population, negotiating lower prices from drug companies and hospitals, and ensuring equitable access. Multi-payer systems give patients more choices among competing insurers but come with significantly higher administrative costs, since every insurer maintains its own billing, claims processing, and bureaucracy.
The public option is a middle path that has gained traction at both the state and federal level. Rather than replacing private insurance, it would create a government-run plan that competes alongside private options on the marketplace. The design details are hotly debated. Industry groups generally want the public option to negotiate rates with providers, similar to private insurers. Academic experts and consumer advocates tend to favor administratively set rates based on Medicare, which would be lower. Rural health organizations have pushed for higher reimbursement in underserved areas, with one prominent proposal adding 50% above Medicare rates for rural providers. Most proposals would cover at least the same essential health benefits currently required under the ACA, with some advocates pushing for more comprehensive coverage than private plans offer.
Drug Pricing and Recent Legislation
Prescription drug costs are one of the most visible pain points for patients, and recent reform has targeted them directly. The Inflation Reduction Act, passed in 2022, gave Medicare the authority to negotiate prices with drug manufacturers for the first time. The program started with 10 drugs in 2026 and will scale up to 20 drugs per year by 2029. For each selected drug, the government negotiates a “maximum fair price” that manufacturers are required to accept for Medicare patients.
The same law extended enhanced premium subsidies for plans sold on ACA marketplaces through 2025, keeping monthly costs lower for millions of people who buy their own insurance.
Health Equity as a Reform Priority
Reform isn’t just about overall spending and coverage numbers. It also aims to close gaps in care that fall along racial, ethnic, and income lines. The ACA included provisions for culturally appropriate outreach to enroll underserved populations in Medicaid and the Children’s Health Insurance Program. Navigator programs, which help consumers understand and choose insurance plans, are required to be culturally competent.
States have taken this further. Maryland, for example, used disparities data when designing its coverage expansion and built financial incentives to reward providers who reduce racial and ethnic health gaps. These include encouraging physicians to practice in underserved communities, reducing preventable hospitalizations in minority populations, and providing grants to community health centers that serve low-income and uninsured residents on a sliding fee scale. The state also required that its health insurance exchange board include members with expertise in the health needs of diverse communities.
These efforts reflect a broader recognition that expanding coverage alone doesn’t guarantee equal access. Language barriers, geographic isolation, distrust of the medical system, and differences in the quality of nearby facilities all shape whether people actually receive the care they’re entitled to.