Marketplace Pulse: Overcharged and Shortchanged

The Marketplace Pulse series provides expert insights on timely policy topics related to the health insurance marketplaces. The series, authored by RWJF Senior Policy Adviser Katherine Hempstead, analyzes changes in the individual market; shifting carrier trends; nationwide insurance data; and more to help states, researchers, and policymakers better understand the pulse of the marketplace.

Long-simmering cries of dissatisfaction with the U.S. healthcare system have recently reached a crescendo. Paying for healthcare leads the list of economic worries for American households, eclipsing rent, food, transportation, and utilities. Nearly half of working-aged adults reported difficulty affording care for themselves or a family member in the last year, and more than four in ten Americans have medical debt. A growing anxiety and frustration over the ability to afford and access care is shared by Americans from all walks of life—regardless of income, zip code, insurance status, or race.

The problems with our healthcare system are so frequently enumerated that they are easily reduced to a grim litany that most of us now know by heart. The headline is that we spend much more on healthcare than other comparable countries (about twice as much per person) but have far less to show for it. American exceptionalism in healthcare boils down to four things: 1) Higher prices for needed services and prescription drugs, 2) Higher administrative costs, 3) Poorer outcomes, and 4) Millions living without health insurance and taking on personal debt as a result.  

Even for those who are insured through their job, these problems manifest themselves in escalating premiums and increased exposure to out-of-pocket costs. The average total cost of an employer-provided health plan in 2026 soared to about $37,000 for a family of four and approximately $8,500 for an individual. Employees shoulder a little over 40% of this cost directly, contributing nearly 30% through premium payments and 15% through out-of-pocket costs. The cost of this coverage has nearly tripled since 2005, growing an average of 6.1% each year. Meanwhile wages have grown at a much slower pace.

The upshot is that paying for healthcare is eating up an ever-growing share of workers’ income, crowding out food, gas, housing, education, and savings. This encroachment affects individual families but also society more broadly. We can see this, for example, when school districts in New Jersey and other states have to lay off teachers because of the growing cost of their health benefits. This is a reallocation of societal resources away from education to healthcare, and an apt illustration of how the outsize growth of the cost of healthcare is accurately described as a “tapeworm,” not just on productivity in some abstract sense, but on our collective present—and future—wellbeing.

People with skyrocketing employer plans are supposedly the lucky ones that have “good” insurance. As a result of recent federal policy decisions, most who need to get coverage on the individual market are navigating an even starker tradeoff between very high premiums and very high deductibles. Millions have responded by dropping their coverage altogether, joining a rapidly growing population of uninsured Americans, whose ranks will swell with the estimated 5 to 10 million more people that will lose Medicaid coverage as work requirements and other new federal rules take effect. Those without insurance are forced to take enormous risks with their health and financial security, facing the near certainty of medical debt if they need care.   

While a particular fear for the uninsured, the impact of medical debt is far broader as high out-of-pocket costs also create financial vulnerabilities even for those with insurance. Depending on the exact definition, between 12% and 41% of American adults have some medical debt. Debt collection comes from many sources—hospitals, doctors’ offices, labs, and imaging centers. Garnishment of wages is a go-to strategy, and a small industry of lawyers and revenue cycle managers make their living trying to collect from people who had to trade away their financial security because they needed care they couldn’t afford.

The consequences of such a system are not just financial. People who are worried about the threat of debt avoid seeking care, often with disastrous consequences. High costs leave people feeling unprotected, even if they are insured. The unaffordability of healthcare is a public health issue. It is also an equity issue. The characteristics of our healthcare system reflect and deepen longstanding racial and geographical inequalities. Rates of uninsurance and medical debt are higher among Black and Hispanic people, in rural areas, and in Southern states. People with lower incomes have more difficulty affording premiums and cost-sharing, and are the most likely to forgo care and struggle with debt. People with fewer economic opportunities are more likely to work at jobs that don’t offer coverage, and to depend on public programs that are increasingly difficult to access.

Almost no one would defend our current system. Its evolution has been piecemeal and constrained by politics and the limits of our vision. Over time it has evolved to become the expensive, inefficient, and inequitable morass that it is today. It suffers from both excessive fragmentation and excessive consolidation. A misaligned tax code creates incentives for too much spending and distorts prices.

The system showcases the worst elements of the private sector—rent-seeking behavior, conflicts of interest, short-term thinking—without benefits like transparency and efficiency, or the kind of competition that leads to lower prices and better outcomes for people. While nearly half of every healthcare dollar spent comes from the public sector, there is far too little leverage on prices, and far too much spent on administrative costs. Just as there is no single explanation for how we got here, there is not one lever we can pull to fix everything. But there are many options for improvement, and the demand for systematic change is high and rising.

The idea that health is a right is not a principle of our current system. But this idea is as pragmatic as it is aspirational. High healthcare costs impede the productivity of our economy, but a healthy population is a growth accelerant. Believing that everyone has the right to live their healthiest life is believing that we will be stronger as a nation when everyone is able to get the care that they need. It is an acknowledgement that uninsurance and the unaffordability of healthcare is everyone’s problem.   

That is why RWJF is supporting One Nation, Overcharged, a nationwide, people-powered movement led by 12 national partners and joined by more than 150 state and local advocacy organizations across healthcare, civil rights, faith, and civic communities. The campaign is working to turn widespread frustration into collective demand for action. Through storytelling, research, digital outreach, and community-driven events—from town halls and health fairs to neighborhood and faith gatherings—it is elevating the experiences of people harmed by high costs, equipping advocates to organize locally, and creating more ways for people to speak up and get involved. Together, these partners and advocates are working to make the affordability crisis impossible to ignore and build momentum for lower costs, greater accountability from healthcare corporations, and a system that puts people’s health over profits and works for everyone—regardless of race, income, or where they live.

Our current system is making us poorer and sicker. Its dysfunction deepens existing inequalities and limits our potential, both as individuals and as a country. To make health a right, we must all be able to get the care that we need without jeopardizing other necessities like food and housing. Longstanding problems and recent policy decisions are placing that goal farther from reach. The good news is that there are many paths to an improved system. The bad news is that none are easy, and all come with tradeoffs. But allowing current trends to continue is guaranteed to shortchange our collective future. This should not be an option.