Generally healthy people will be more tempted than ever to pay out of pocket for health care in 2026. Here are the risks

With health insurance premiums projected to spike dramatically in 2026, some Americans are considering a risky gamble: ditching coverage altogether and paying medical expenses out of pocket.

While there's one specific scenario where this strategy might save money, experts warn the potential financial catastrophe far outweighs any short-term savings.

Must Read

• Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how

• Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — here’s what it is and 3 simple steps to fix it ASAP

The rising cost crisis

Health insurance costs are climbing at an alarming rate. Moneygeek.com reports that Affordable Care Act (ACA) marketplace premiums are forecasted to jump an average of 114% nationwide next year, mainly due to the Act's premium tax credits expiring on December 31. This could impact 22 million Americans, resulting in an annual increase of about $1,016 per household (1).

And this news is worrisome for many. According to a recent poll conducted by The Associated Press-NORC Center for Public Affairs Research, about 60% of Americans are "extremely" or "very" concerned about their health costs going up in the next year, whether they have insurance or not (2).

As of this past summer, approximately 27.2 million Americans lack health insurance, representing 8.2% of the population, according to the CDC (3). The Congressional Budget Office projects 3.8 million people will lose coverage annually starting in 2026, potentially pushing that number to 31 million by 2027 (1).

Going without might be cheaper — but at what cost?

There's a single scenario where skipping health insurance could theoretically save money: if you don't have access to employer or government-sponsored coverage and you remain healthy throughout the year — something that is never guaranteed for anyone.

This means for some people, total health care costs "could amount to higher spending on medical care than if (they) were uninsured, especially (if they) are healthy or rarely use health care," Anna Doar Sinaiko, a professor of health economics and policy at Harvard University, told Newsweek. And Gerard Anderson, a professor of health policy and management at Johns Hopkins University, explained costs could be lower for those who are lucky enough to "not get hit by a bus, develop cancer or have a heart attack and incur a big bill.”

In other words, if you're paying thousands annually in premiums plus deductibles, and you only need occasional primary care, your total insurance costs might exceed what you'd pay in cash. Some providers even offer lower cash prices, noted Christopher Whaley, a professor at Brown University, which can be cheaper for patients and "saves providers the hassle of going through insurance processes."

However, Anderson cautioned that 20% of people typically incur 80% of the health care costs, but since we don't know who ends up in that 20%, "Unless you are an extreme risk taker, it is always better to have health insurance (4)."

Trending: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B — start using them today to get rich (and then stay rich)

The catastrophic risk

The problem with gambling on staying healthy is that accidents don't announce themselves in advance. One unexpected medical crisis can financially devastate an uninsured person. This is why many choose to get protection against high treatment costs and take the insurance route.

According to HealthCare.gov, a broken leg can cost up to $7,500, while the average three-day hospital stay runs around $30,000 (5). For car accident victims, the CDC reports the average medical bill is $5,800 for emergency department treatment (6). Emergency room visits for such accidents have averaged over $3,000, while hospitalization can be $57,000 or more, according to estimates from BestLawyers.com (7).

Another reason insurance is a good idea for expensive care like this, Whaley added, is that insurers "negotiate discounts off of provider rates, (so) if a patient has a hospital stay, then costs without insurance could be much higher than insurance prices (4)."

Anyone can develop a chronic health condition, and going without insurance adds both financial and health risk. Those with chronic conditions like diabetes or heart disease require ongoing medication and monitoring — expenses that, when covered out-of-pocket, quickly surpass insurance premiums.

Finally, going uninsured also means sacrificing preventive care. Sinaiko warned that "People without insurance use less care, even high-value care, which can impact future health (4)."

Employer coverage is the main path to affordability

The cost-benefit calculation changes dramatically depending on your insurance source. Those with employer-sponsored coverage pay significantly less than individuals purchasing private plans, as employers typically cover a substantial portion of premiums.

For those without employer coverage facing 2026's projected increases, the dilemma is big: pay premiums that strain your budget, or risk financial ruin from one medical emergency.

And if more healthy Americans opt out, everyone pays the price. "The people with health insurance will see their premiums increase even faster without the healthy people in the pool," Anderson warned. "This is something known as the insurance death spiral, which occurs when only the sickest people purchase health insurance (4)."

With 63.2% of uninsured adults naming affordability as their main barrier (1), the issue isn't that people want to go uninsured — it's that they feel they have no choice. But one car accident, one fall, or one unexpected diagnosis could result in medical bills that take years to pay off or lead to bankruptcy.

You May Also Like

• I’m almost 50 and have nothing saved for retirement — what now? Don’t panic. These 6 easy steps can help you catch up (and fast)

• Dave Ramsey says this 7-step plan ‘works every single time’ to kill debt, get rich — and ‘anyone’ can do it

• 22 US states are now in a recession or close to it — protect your retirement savings with these 10 essential money moves

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Moneygeek (1); PBS (2); CDC (3); Newsweek (4); Healthcare.gov (5); CDC (6); BestLawyers (7)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.