Nearly half of Americans express concern about their ability to afford healthcare, as soaring insurance premiums and rising medication costs create significant financial strain.
As federal health care subsidies expired in December 2025, millions of Americans faced a sharp increase in insurance premiums, leading to a significant drop in new enrollments in Covered California. State officials reported that only about 175,000 individuals signed up, marking a 30% decline compared to the previous year.
During a briefing on January 16, experts from American Community Media attributed this decline to a doubling of premiums following the expiration of subsidies. Anthony Wright, Executive Director of Families USA, noted that for many middle and low-income families, the increase amounted to “a tripling or a quadrupling” of their monthly costs due to the loss of advance tax credits.
Couples in their 50s and 60s now face annual coverage costs exceeding $10,000 to $15,000, according to Wright. Many individuals who were automatically renewed into their healthcare plans may soon lose coverage as they struggle to afford the higher premiums. Others may opt for lower-tier plans that come with exorbitant deductibles.
The situation is particularly dire in California, where new enrollment dropped by 27% in Contra Costa County, 24% in Alameda County, and 23% in Santa Clara County. After the additional assistance was removed, the average cost of a Covered California plan doubled for 2026. Middle-income households and adults approaching Medicare eligibility experienced the most significant increases, with monthly premiums rising from $186 to $365.
Caroline Hanssen, a 57-year-old resident of San Anselmo, California, shared her experience with the drastic premium hike in a New York Times article. Her insurance premium surged from $406.47 in 2025 to $1,122.99 per month for bronze-level coverage, prompting her to drop her insurance altogether.
As healthier individuals like Hanssen abandon their coverage, insurers are left with a sicker, more expensive pool of patients, which in turn drives up premiums for everyone else. William Thompson from Charlottesville, Virginia, is feeling the impact firsthand; although he did not qualify for subsidies last year, his premiums increased by over $650 a month this year.
Wright anticipates that many Americans will attempt to pay their premiums, which could accumulate to hundreds or thousands of dollars in the coming months. However, he cautioned that this may force individuals to forgo other essential needs or risk becoming uninsured.
The broader implications of these changes are concerning. Wright warned that the departure of healthier individuals from insurance coverage would place financial stress on the healthcare system overall. Community clinics, hospitals, and other providers with fewer insured patients would be compelled to reduce services, potentially jeopardizing their ability to remain operational.
The Affordable Care Act (ACA) Marketplace, which was initially bolstered by enhanced advance premium tax credits as part of the American Rescue Plan in 2021, has seen significant shifts. These credits were designed to lower monthly health insurance premiums for low- and middle-income individuals lacking employer-sponsored or government coverage. In 2025, over 20 million Americans selected an ACA Health Insurance Marketplace plan, with 93% of enrollees receiving premium tax credits.
Dr. Neal Mahoney, a Professor of Economics at Stanford University, highlighted that the United States allocates a larger share of its resources to healthcare than any other country. Over the past two generations, healthcare expenditure in the U.S. has doubled from approximately 8% to 18% of the gross domestic product (GDP). While the federal government covers nearly 50% of healthcare costs, the burden remains unaffordable for millions of families, limiting resources for other critical areas.
For families, the average cost of health insurance, with significant employer contributions, has reached $27,000. However, out-of-pocket premiums have risen more rapidly than wages for employer-sponsored insurance, leading to dramatically increased deductibles that employees must pay before their insurance takes effect.
Small businesses are also feeling the pressure of rising healthcare costs. Dr. Mahoney noted that when healthcare expenses increase, small businesses often respond by lowering wages, reducing wage offers to new hires, or even laying off workers. The current labor market is described as “frozen,” with many small businesses opting not to provide health insurance at all, which creates stress and negatively impacts workforce productivity.
Merith Basey from Patients For Affordable Drugs emphasized the alarming reality that one in three Americans cannot afford their prescription medications. On average, Americans pay four to eight times more for brand-name drugs than patients in other high-income countries. The pharmaceutical industry has been criticized for exploiting the patent system to set launch prices and maintain monopolies, making it difficult for generics to enter the market.
Polling indicates that 47% of Americans are worried about their ability to pay for healthcare costs in 2026. Basey pointed out that increased competition could lead to a significant reduction in prices, yet many Americans remain skeptical about Congress’s willingness to enact necessary reforms.
As the nation approaches a presidential election focused on affordability, experts argue that addressing healthcare for working families should be a priority for every member of Congress, given the widespread concern over rising costs.
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