Intended for healthcare professionals

Feature Essay

Understanding the American healthcare reform debate

BMJ 2017; 357 doi: (Published 07 June 2017) Cite this as: BMJ 2017;357:j2718
  1. Donald M Berwick, president emeritus and senior fellow
  1. Institute for Healthcare Improvement, Cambridge, Massachusetts, USA
  1. dberwick{at}

If you don’t understand American healthcare, join the crowd. Donald M Berwick explains US government attempts to repeal and replace the Affordable Care Act

Debates over the US healthcare reform law—the Affordable Care Act (ACA) or “Obamacare”—have raged for almost a decade, with new fury now in the “repeal and replace” initiatives of the Trump administration. The act is complex, the more so because its provisions build on an already tortuous non-system of financing and delivering care to the people of the United States.

Here I present a quick tour of that non-system, an explanation of the basics of the ACA, and an analysis of the present attempts to undo it. Although I have tried to be technically correct, I make no claim to be non-partisan. I was President Obama’s appointee as administrator of the US Centers for Medicare and Medicaid Services between July 2010 and December 2011, which provides insurance at a cost above $820bn (£640bn; €730bn) to over 100 million Americans and which was and is responsible for implementing and managing more than 70% of the provisions of the ACA. I am a fan of the ACA, and I strongly oppose its repeal.

Understanding the ACA and its critics requires an understanding of how the US funds its healthcare. There are seven main routes of funding (box 1).

Box 1: How the US funds healthcare

  • Employer sponsored insurance for about 160 million people—workers and their families—in which premium costs are shared between employers (usually 60%-80% of the costs) and employees

  • Medicare—the tax supported federal health insurance scheme established in 1965 for Americans over 65 years of age (about 50 million people) and some others with disabilities

  • Medicaid—tax supported insurance, also begun in 1965, managed through the states and funded by a sharing of costs between states and the federal government, covering the care of people …

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