US Healthcare

The US healthcare system is the largest in the world in terms of spending, reaching US$4.9 trillion in 2024 – accounting for 17.3% of GDP. This is the highest proportion among developed countries, nearly double the OECD average (9.9%). However, the system results in a life expectancy of only 79 years – lower than many other developed countries such as Japan (84), Switzerland (83), and France (82).

The specific structure of the system is a combination of a dominant private sector and the federal public programmes Medicare and Medicaid. This article summarises the key components of the United States healthcare system based on official data from Centers for Disease Control and Prevention (CDC) and the Centers for Medicare and Medicaid Services. This is an extension of the page United States overview, linked to United States demographics is ageing.

Healthcare system structure

The United States healthcare system is not a universal healthcare system like many other developed nations. Instead, it is a hybrid model based primarily on private insurance, combined with public programmes for vulnerable groups.

Insurance classification

In 2024, 92% of the population had insurance. Classification by source: employer-sponsored insurance 54%, Medicare 18% (primarily those 65+), Medicaid 18% (low income), direct market purchase 7%, and military programmes such as TRICARE 3%. Approximately 8% of the population (27 million people) remain uninsured — a major issue for the system. The uninsured are primarily undocumented immigrants, young people without formal employment, and low-income self-employed workers.

The government’s role in United States healthcare

The federal government spent US$1.8 trillion on healthcare in 2024 — 37% of total national healthcare expenditure. The Department of Health and Human Services (HHS) operates major programmes through its agencies: the Centers for Medicare and Medicaid Services (CMS) manages Medicare and Medicaid, the Food and Drug Administration (FDA) regulates drugs and medical devices, the Centers for Disease Control and Prevention (CDC) manages public health, and the National Institutes of Health (NIH) funds medical research. States also play a significant role in Medicaid and the regulation of professional licensing.

Private health insurance

Private insurance is the largest component of United States healthcare, covering 67% of the population. Giant insurance companies dominating the market include UnitedHealth Group, Anthem (Elevance Health), Aetna (CVS), Cigna, and Humana.

Employer-sponsored insurance

Approximately 156 million Americans have employer-sponsored insurance (ESI) — this is the largest source of insurance. This system dates back to World War II when the government imposed wage caps, leading businesses to compete through health benefits. Employers typically cover 70-80% of insurance premiums, with employees paying the remainder through payroll deductions. The average ESI premium in 2024 reached US$25,572 per year for families and US$8,951 for individuals.

Types of insurance plans

There are four main types of plans: HMO (Health Maintenance Organization) — the lowest cost but restricted to a network of doctors and requiring a Primary Care Physician referral for specialists. PPO (Preferred Provider Organization) — more flexible, allowing out-of-network visits but at a higher cost. EPO (Exclusive Provider Organization) — a combination of HMO and PPO. HDHP (High Deductible Health Plan) — low premiums but high deductibles, often paired with a Health Savings Account (HSA). Each type has different premium and deductible levels, which users must carefully consider.

Self-purchased insurance costs

For those without employer-sponsored insurance, plans can be purchased on the Marketplace (Obamacare exchange) or directly from insurance companies. Individual premiums for a young non-smoker range from US$350-550 per month depending on the state. For a family of four: US$1,500-2,200 per month. When participating in the Marketplace, families with income below 400% of the Federal Poverty Level receive subsidies that significantly reduce premiums. This subsidy level was expanded through the Inflation Reduction Act 2022 to include families with higher incomes.

Medicare for those over 65

Medicare is a federal health insurance programme for people aged 65 and older and certain groups with disabilities. It is a critical component of United States healthcare, covering 66 million people in 2024.

The four parts of Medicare

Medicare is divided into four parts (Parts):

• Part A — Hospital Insurance: free for those who have paid Medicare taxes for at least 10 years. It covers hospital stays, hospice care, and certain home health services
• Part B — Medical Insurance: premium of US$175 per month in 2024. It covers doctor visits, preventive screenings, and certain medical equipment
• Part C — Medicare Advantage: a comprehensive plan managed by private companies, replacing Part A and B
• Part D — Prescription drug coverage: premium of US$35-100 per month depending on the plan

Medigap

Medigap (Medicare Supplement Insurance) is supplemental insurance from private companies that covers costs Medicare does not, such as deductibles, copays, and coinsurance. There are 10 standard plans (A through N), with premiums of US$100-300 per month depending on the plan and age. Approximately 25% of Medicare beneficiaries have additional Medigap coverage. This complex Medicare system requires elderly Americans to seek advice from Medicare Counselors to select the right plan.

Medicare financing

Medicare is funded through Medicare taxes (1.45% from employees and 1.45% from employers, totalling 2.9%). High-income earners pay an additional 0.9% (Additional Medicare Tax). Total Medicare expenditure in 2024 reached US$1,046 billion — 17% of the federal budget. The Medicare Part A Trust Fund is projected to be depleted by 2036 without reform, due to an ageing population and healthcare costs rising faster than tax revenue.

Medicaid for low-income individuals

Medicaid is a health insurance programme for low-income individuals, co-funded by the federal and state governments. It is the largest healthcare programme in the country by number of people covered — 79 million in 2024 (24% of the population).

Medicaid eligibility

Eligibility varies by state because Medicaid is a state-federal programme. General criteria: family income below 138% of the federal poverty level in states that expanded Medicaid (under the ACA), or lower in states that did not. The 2025 federal poverty level is US$15,650 per year for an individual and US$32,150 for a household of four. Medicaid beneficiaries pay no premiums and typically have copays of US$0-5 for visits and prescriptions. 41 states and the District of Columbia have expanded Medicaid under Obamacare, while 9 states have not (primarily Republican states in the South).

CHIP for children

The Children’s Health Insurance Program (CHIP) is an insurance programme for children from families with incomes above the Medicaid threshold but who cannot afford private insurance. In 2024, CHIP covered 7.2 million children. Premiums range from US$0-50 per month depending on the state. Children receive health check-ups, vaccinations, dental care, and vision care for free or at a very low cost. Thanks to Medicaid and CHIP, the uninsured rate for children was only 4.4% in 2024.

Affordable Care Act

The Affordable Care Act (ACA, “Obamacare”), signed in 2010 under President Obama, is the largest reform of the United States healthcare system in 60 years. Its goals: to expand insurance to the uninsured, control costs, and improve the quality of care.

Key points of the ACA

The ACA has five pillars: (1) Health Insurance Marketplace — an online exchange allowing individuals and small businesses to purchase insurance; (2) Premium Tax Credit — subsidies for families with incomes 100-400% of the poverty level (expanded to 600% in the Inflation Reduction Act); (3) Expansion of Medicaid to 138% of the poverty level (optional for each state); (4) Prohibition of discrimination based on pre-existing conditions; (5) Allowing children to remain on their parents’ insurance until age 26. The ACA reduced the uninsured rate from 16% in 2010 to 8% in 2024.

Controversy and legal challenges

The ACA is one of the most controversial laws in the history of United States healthcare. The Republican Party has attempted to repeal it multiple times — Trump’s first term attempt failed in 2017 (due to Senator John McCain’s deciding vote). The Supreme Court has ruled on the ACA three times: 2012 NFIB v. Sebelius, 2015 King v. Burwell, and 2021 California v. Texas. The ACA remains in effect today despite many changes to its details. In his second term starting in 2025, Trump has stated he will adjust the ACA but not repeal it entirely.

Hospitals and physicians

The hospital and physician system is the “supply” side of United States healthcare, with world-class quality at leading medical centres but also significant disparities between regions.

World-class hospitals

According to Newsweek 2024, 12 of the top 20 hospitals in the world are in the United States: Mayo Clinic (Minnesota) #1, Cleveland Clinic (Ohio) #2, Massachusetts General Hospital #3, Johns Hopkins (Baltimore) #4, UCLA Medical Center, NewYork-Presbyterian, Cedars-Sinai (Los Angeles), MD Anderson Cancer Center (Houston, the world’s leading cancer centre), and Memorial Sloan Kettering (New York). The country has a total of roughly 6,100 hospitals with 916,000 beds. The hospital system is divided into three categories: non-profit (60%), for-profit (20%), and government and military (20%).

Doctors and specialities

The United States had 1.06 million practising doctors in 2024—a ratio of 3.1 doctors per 1,000 people, which is lower than the OECD average of 3.7. The pathway to becoming a doctor takes 11–15 years: a 4-year bachelor’s degree, 4 years of medical school, 3–7 years of residency, and 1–3 years of fellowship (for sub-specialities). Doctors in the US are the highest-paid in the world: family doctors earn US$240,000 per year, cardiologists US$490,000, and neurosurgeons US$700,000. The total number of new medical students entering school in 2024 is 22,000, which is insufficient to meet demand—leading to the importation of foreign-born doctors (28% of doctors are foreign-born).

Nurses and Nurse Practitioners

Registered Nurses (RNs) form the largest profession in United States healthcare with 4.2 million people. The average salary is US$86,000 per year, reaching US$124,000 in California. Minimum qualifications include an ADN (Associate Degree in Nursing, 2 years) or a BSN (Bachelor of Science in Nursing, 4 years). A Nurse Practitioner (NP) is a nurse with a Master’s or DNP degree who has the authority to examine patients and prescribe medication—earning US$130,000 per year. This sector suffers from a severe talent shortage, particularly following COVID-19, with many hospitals recruiting nurses from the Philippines and Vietnam via the EB-3 Schedule A category.

Healthcare service costs

United States healthcare costs are the highest in the world and represent the largest source of personal debt. This is a primary weakness of the system—although care quality is top-tier at leading centres, ordinary citizens often face financial hardship when ill.

Prices of standard services

Nominal prices without insurance: a family doctor visit costs US$200–400, a specialist visit US$350–600, an Emergency Room visit US$1,500–3,000 per trip, a normal birth US$14,000, a C-section US$26,000, an appendectomy US$33,000, and a heart stent placement US$75,000. A severe cancer case can burn through US$500,000 in 1 year of treatment. Medical bills are the number one cause of personal bankruptcy in the United States—accounting for 530,000 bankruptcies per year linked to medical debt.

Prescription drug prices

United States drug prices are 2 to 4 times higher than in other developed countries. For example, Humalog insulin costs US$274 per vial in the US vs US$21 in the UK and US$12 in France. The cancer drug Keytruda costs US$12,000 per dose in the US vs US$4,000 in Germany. In 2022, the Inflation Reduction Act allowed Medicare to negotiate drug prices with pharmaceutical companies for the first time, projected to reduce the prices of the first 10 drugs by 25–60% starting in 2026. Settling Vietnamese immigrants can bring prescription drugs from Vietnam (subject to FDA regulations on personal quantities).

Deductibles and copays

Even insured individuals must cover various out-of-pocket costs: a deductible (the amount paid out-of-pocket before insurance begins coverage) averaging US$1,787 per year for individuals and US$3,811 for families; a copay (flat fee per visit) of US$20–50; and coinsurance (% share of costs) of 20–30%. The out-of-pocket maximum averages US$4,500–9,000 for individuals and US$9,000–18,000 for families. Once the maximum is reached, insurance covers 100% of the remainder.

Vietnamese people and insurance options

When settling in the US via investment or family categories, Vietnamese nationals need a clear understanding of United States healthcare to choose the right insurance policy matching their age, health, and budget.

Different circumstances

For EB-5 immigrants: as permanent residents, they have the right to purchase Marketplace insurance and are eligible for Medicaid if low-income. After 5 years of permanent residence and reaching age 65, they qualify for Medicare. E-2 immigrants (non-immigrants): must purchase private insurance or corporate insurance through their own company. H-1B immigrants: typically receive insurance through their employer. F-1 international students: universities usually require the purchase of student insurance costing US$1,500–3,000 per year.

Insurance selection strategy

Healthy young families with low medical needs: choose an HDHP with an HSA—low premiums of US$400–600 per month, high deductible of US$3,000–6,000. HSAs allow pre-tax savings up to US$4,150 per year for individuals and US$8,300 for families. Families with elderly members or underlying health conditions: choose an HMO or PPO with a low deductible and higher premiums of US$800–1,500 per month. Individuals over 60 nearing Medicare eligibility: typically prioritise a PPO with a broad network. The Vietnamese community in California, Texas, and Florida features many Vietnamese-speaking doctors—an important factor when selecting a plan that includes Vietnamese doctors within the network.

Vietnamese doctors and hospitals

The 2.3-million-strong Vietnamese community includes thousands of Vietnamese doctors and nurses across the country. They are most densely concentrated in Orange County (Westminster, Garden Grove, Santa Ana), San Jose, Houston, Atlanta, and Falls Church. Several large medical centres serve the community: AltaMed Health Services (California), Garden Grove Hospital (California), and Viet-Am Medical Center (Houston). Vietnamese individuals moving to the US via residency by investment in the United States can enjoy high-quality medical services with doctors sharing their language and culture. To choose a suitable settlement location, refer to the article the Vietnamese community in the United States.