Health disparities by racial or ethnic group or by income or education are only partly explained by disparities in medical care. Inadequate education and living conditions—ranging from low income to the unhealthy characteristics of neighborhoods and communities—can harm health through complex pathways. Meaningful progress in narrowing health disparities is unlikely without addressing these root causes. Policies on education, child care, jobs, community and economic revitalization, housing, transportation, and land use bear on these root causes and have implications for health and medical spending. A shortsighted political focus on reducing spending in these areas could actually increase medical costs by magnifying disease burden and widening health disparities.