The essential problem is the way health insurance works in the US. The basic function of insurance is to protect people from strongly adverse events that would put them into financial distress. Insurance companies have to charge more than an actuarially fair rate for insurance in order to make a profit. This means that it is inefficient to run small or high probability expenses through an insurance scheme. The only reason this happens in the US is the tax deductibility of insurance and the mandates on coverage in some states. This turns health insurance into an inefficient health savings scheme.

Furthermore community rating produces very adverse outcomes. By preventing insurance companies from pricing insurance policies at a different rate for each customer (thus creating an expected profit from each customer), the insurance company has an incentive to refuse cover to high risk people (i.e. those that need insurance the most) or drive them away by making their life a misery every time they try to lodge a claim. To the extent they can't do this it drives low risk people out of the market, which leave them exposed if they suddenly need emergency health care (this is especially problematic since low risk people are generally young and therefore have little savings) and insurance companies have to raise premiums further to make up for the loss of the highly profitable young people.

My advice to the US government would be to end community rating, guaranteed issue and mandated coverage. I would suggest eliminating the tax deductibility of insurance (or failing that, make putting money into a Health Savings Account tax deductible). Medicare and Medicaid should be discontinued and replaced with a system of income support where poor or unusually sick people would receive extra money in a health savings account that could be spent on healthcare or health insurance. If you have to include old people in the scheme explicitly to make it politically possible, that would be OK as a second-best solution.

The basic principle in this is to let market mechanisms work in the absence of a clear market failure and then deal with people who can't afford vital services by helping them directly. To what extent you provide that help is a terminal values question so I won't venture an opinion here, but however much or little you want to help, this system should result in cheaper insurance for most people and essential coverage for the poor or those in need of extraordinary levels of health care. It should also arrest the escalating health costs of the US government.