Health Care Costs Escalate, Forcing More Americans to Forgo Insurance
Rising premiums and overall economic pressures are leading to increased numbers of uninsured individuals, creating a cycle of higher costs.
The cost of health insurance in the U.S. is becoming increasingly unsustainable, pushing more individuals and families to drop coverage despite employer contributions. Amber Kostka, owner of The Stockpot restaurant in Hampton Roads, Va., has seen premiums for her employees' health insurance roughly triple since 2018. Despite sharing costs with employees, many now find the premiums unaffordable, leading to a decline in enrollment from 50% prior to COVID-19 to about 35% of eligible employees.
This trend is reflected nationally, with research from the Commonwealth Fund indicating that the share of working-age U.S. adults without health insurance rose to 11.2% in 2026, up from 8.9% in 2024. Rising costs for essentials like gasoline, housing, and food are forcing difficult financial decisions, with health insurance often being sacrificed. Kostka notes that employees face a stark choice: "It’s just a cost thing, at the end of the day. You can’t stop paying for groceries."
The situation is exacerbated by increases in premiums on the Affordable Care Act (ACA) marketplace, which rose an average of 58% in 2026 following the non-renewal of expiring subsidies. This creates a challenging environment where rising numbers of uninsured patients lead hospitals to increase prices to cover the costs of uncompensated care, potentially driving insurance costs even higher and creating a detrimental cycle.
Beyond the impact of the uninsured, employers are facing significant increases in overall health benefit costs. A Marsh survey projects total health benefit costs per employee to rise 8.2% in 2027, the highest increase since 2003. Factors contributing to this rise include the consolidation of health systems, which can lead to monopolistic pricing, and reduced government spending on public health programs, shifting costs to private sector plans.
Innovations and new treatments also contribute to rising expenses. The adoption of AI scribes by doctors to assist with billing for more services, and the implementation of a clause in the No Surprises Act related to arbitration for disputes, have added billions to healthcare costs. Furthermore, the availability of new, expensive treatments, such as GLP-1 medications for weight loss, represents a significant new category of expense.
Employers are increasingly passing these rising costs onto employees. The KFF employer health benefits survey shows workers paying an average of $7,471 annually towards family health benefits, a 9% increase from 2025. Workers at small firms, like Kostka's, are disproportionately affected, paying about $9,687 for family coverage. Deductibles for employer-sponsored plans have also risen 34% over the past decade, making care more costly to access even with insurance.
In response to escalating costs, employers are exploring various strategies. Some are reducing coverage for certain treatments or steering employees toward specialized medical facilities known as Centers of Excellence, which may offer long-term cost savings. Others are encouraging employees to seek out more affordable prescription drug options and providing reimbursement. A smaller number of employers are opting out of offering insurance altogether, instead providing employees with cash to purchase plans through the ACA marketplace via Individual Coverage Health Reimbursement Arrangements (ICHRAs).
Mas Torito, owner of Kokoro restaurant in Denver, illustrates the strain on small businesses, having spent close to $150,000 on employee premiums in 2025 and anticipating $200,000 in 2026—a significant portion of his restaurant's revenue. Like Kostka, he sees a rising proportion of his employees unable to afford the insurance, with only about 40% currently enrolled. The increasing deductibles and premiums force employees to question the value of their coverage.