This story by Renuka Rayasam and Sam Whitehead appeared on KFF Health News on October 26, 2026. We are sharing it in two parts.
Bill McAdams, a 45-year-old travel nurse from Holiday, Florida, was uninsured last year when he experienced a stroke. He hadn’t been able to afford his agency’s health plan, which would have cost $3,600 monthly to cover him and his wife. The hospital that treated him sent him a bill for $93,000.
Janet Marx, 56, of Milford, Connecticut, has doubled up on insurance coverage through her husband’s employer and Medicare because she has lupus and fibromyalgia, disabling chronic conditions. Still the couple sold their home, the house where Marx grew up, to afford the costs of their medical care.
Sheila Robinson, 61, in District Heights, Maryland, has a $10,000 deductible on her Affordable Care Act plan, so she tries to negotiate cheaper self-pay options when she sees a doctor. She puts the $659 monthly premium on her credit card, even though she knows not paying the bill in full means she must pay interest.
“I am just afraid to even go to the doctor,” said Robinson, who has arthritis, a pinched nerve in her neck, and high blood pressure. “Every month, I am in the hole.”
This year, KFF Health News has chronicled how rising healthcare costs are upending the lives of Americans. Reporters have heard from more than 130 people across the U.S. who are trying to afford their premiums, copayments, prescriptions, and medical bills even as housing, energy, and food costs swell. People told us they are forgoing health insurance coverage, rationing their medications, cutting back on doctor visits, and putting off health procedures.
“We’re not talking about the uninsured or those who are low-income who are struggling now,” said Rebecca Kirch, executive vice president at the National Patient Advocate Foundation. “Now it’s become an all-of-us issue.”
While healthcare costs have largely grown faster than the overall economy for decades, they’ve escalated at a dizzying pace recently. In 2023 and 2024, health spending hit its highest growth rates in two decades excluding 2020’s covid-fueled surge.
The prices that hospitals, doctors, and other clinicians charge have increased, along with how much care people are getting. Overall health spending hit nearly $5.3 trillion in 2024, up from $3 trillion a decade earlier, according to federal data.
American health costs, expected to continue growing faster than the overall economy and help fuel it, are projected to hit 20% of the nation’s gross domestic product by 2032, up from just under 19% today.
At the same time, Americans are shouldering higher insurance premium payments and other out-of-pocket costs. Low-income and middle-class people with health conditions are feeling the brunt.
The GOP-led Congress decided against extending covid pandemic-era subsidies for Affordable Care Act plans and cut billions from other federal health programs to offset the costs of tax cuts for wealthy Americans and heightened immigration enforcement, arguing that government insurance programs are rife with fraud and waste.
Despite $500 rebate checks sent by President Donald Trump to fewer than 5% of higher-income ACA marketplace enrollees, his administration has been expanding access to insurance plans with higher deductibles and lower premiums that push more costs to patients if they need care. Employers are passing along rising healthcare costs to employees, and clinicians are charging patients up front.
It’s not all bad news for consumers: Prescription drugs recorded their biggest price drop in decades this year. The Biden and Trump administrations both worked to help lower them amid consumer pressure.
But many say they’re still feeling the pain of rising prices. Ahead of the November congressional midterm elections, healthcare costs continue to top a list of the public’s worries about affordability, according to polling conducted in mid-September by KFF, a health information nonprofit that includes KFF Health News. Nine in 10 Democratic respondents and three-quarters of Republican ones said the U.S. healthcare system needs either a complete overhaul or major changes.
‘Profit Margins Everywhere’
The typical American family spends about $5,600 a year, or 9% of their income, on health insurance premiums, out-of-pocket healthcare costs, and taxes that fund health programs, according to the Peterson-KFF Health System Tracker. But overall, the nation’s annual healthcare spending comes to the equivalent of more than $15,400 per person.
The reason behind those high U.S. healthcare costs is straightforward: The prices that clinicians, hospitals, drugmakers, and other players in the health system charge are high. For example, while doctors in the U.S. perform about a third as many inpatient knee replacements as in other wealthy nations, the cost per surgery is higher than in most of those countries, according to the Peterson-KFF tracker.
More recently, multiple trends have driven that price growth in the U.S., health economists and policy researchers said. Hospitals are merging and using their consolidated market power to charge more. New technologies and therapeutics, such as GLP-1s for weight loss and diabetes, have high price tags. Inflation and the Trump administration’s tariffs are layering costs onto everything from latex gloves to medical devices. And higher numbers of uninsured Americans means fewer people to bear more of the costs.
“It’s really everything all together at once,” said Christopher Whaley, a Brown University health policy researcher.
Why the U.S. has high healthcare prices, however, is more complicated. Whaley and other health economists point to how the American healthcare system is structured and financed. Clinician charges and administrative costs are higher in the U.S. than in other countries. The U.S. doesn’t centrally set all prices for services, ration care, or control for quality.
In most local American markets, insurers negotiate prices with hospitals, clinicians, and drugmakers, which then charge for every test, procedure, or medicine regardless of its outcome. More than half of all healthcare payments were based on this fee-for-service model, according to a 2022 research brief published in the journal Health Affairs. Under this model, hospitals and doctors make more as they bill more.
The complexity of different billing systems, rates, insurers, and networks adds to the price tag. The cost of sending out bills and managing paperwork can be hundreds of billions of dollars. Insurers try to keep medical costs in check, in part by limiting what they’ll reimburse. They also take their own cut along the way.
“There’s profit margins everywhere, and there are varying degrees of financial incentives throughout the healthcare system,” Whaley said.
The incentives, however, don’t necessarily promote better health.
Steven Ullmann, director of the Center for Health Management and Policy at the University of Miami Business School, where he’s a professor, said that the country’s health system encourages expensive treatments over low-cost preventive care. He said that keeps people locked into seeing clinicians because they’re in their insurance networks, not necessarily because they produce better outcomes.
Even though people in the U.S. pay more for care than in other countries, Ullmann said higher prices don’t always mean better quality. For example, he said the prices for prenatal ultrasounds in Orlando vary widely with no obvious difference in quality.
“Same city, same procedure,” Ullmann said. “That is a reflection of a broken system.”
And those high prices can keep people from seeking needed services.
In 2025, a health system garnished the wages of Carmilla Collins, 52, of Omaha, Nebraska.
Collins, a single mother, said she didn’t question the tests or medicines doctors ordered when she got diagnosed with thyroid disease or received regular preventive procedures such as a colonoscopy — until she found herself in debt. The hospital hired a collection agency to sue her for unpaid medical bills that she accrued when she was both insured and uninsured. Then a court allowed the debt collector to take hundreds of dollars out of her paycheck.
Collins remembered being “spitting mad.” She almost couldn’t make rent.
“I’m working two jobs,” she said. “And I’m going to be homeless because of this noose that’s around my neck.”
Collins eventually qualified for financial assistance from the hospital, but she said she put off thyroid surgery for four months even as a goiter swelled against her throat, making it hard for her to eat. She had health coverage through her employer at that point but was worried about affording the costs of her deductible and other fees. Eventually, she said, her health declined until she could no longer put off the surgery.
“I equated taking care of my health with debt that I couldn’t afford,” she said.
Read Part Two… tomorrow…
This article first appeared on KFF Health News and is republished here in two parts under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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