America’s health insurance model crumbles under the success of modern medicine 

Every fall, millions of Americans sit down for the same grim ritual: open enrollment. The insurance logos are familiar, and the email from HR still insists the company is “committed to offering competitive benefits.” Then the sticker shock sets in. 

Heading into 2027, employer plan costs are projected to jump 9.5 percent, pushing the average past $19,000 per worker. On the Affordable Care Act marketplaces, insurers have proposed a median premium hike of 15 percent. And for millions buying their own coverage, the math has stopped working altogether. Over the last year, individual market enrollment plunged by more than 4.5 million people — dropping 18 percent from 25.2 million in 2025 to 20.5 million in mid-2026. Driven by the expiration of COVID-era enhanced tax credits and recent federal policy shifts, it is the steepest drop in a decade.

When premiums spike and millions lose coverage, it is easy to blame insurers, hospital monopolies or drugmakers. They bear plenty of responsibility. But the deeper failure is structural: Our health insurance model is an artifact of an era when medicine didn’t actually work very well.

Tying health insurance to employment and paying for it with pre-tax dollars is an accidental byproduct of World War II wage controls. Back then, medical care was rudimentary. Outside of setting a bone or delivering a baby, you mostly went to the hospital to die. Because effective interventions were rare, pooling risk through the workplace to cover the occasional hospital stay made sense.

Eighty years later, medicine........

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