Jan 11, 2026
Americans are increasingly concerned about the cost of health insurance, and for good reason. The price for medical insurance has increased more than 50% since 2010, according to the Federal Reserve Bank of St. Louis, citing data from the Bureau of Labor Statistics (1).
This may have led some to look for alternate ways to fund their medical expenses, or forgo insurance altogether, relying on private emergency savings to cover any bills and betting on their own good health to avoid the massive cost of traditional insurance.
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Imagine the case of Elliott. As a self-employed consultant, he pays high costs for health care for his family. But starting in 2026, he’s thinking about opting to save the money he would have spent (a projected $25,000 for the year on a plan with a $15,000 deductible) and instead put funds aside in case of any health issues.
Elliott is in his 30s, and he and his wife have no chronic conditions or major family history of health concerns. But is he right to go this route? Below, we’ll discuss the risks involved in self-funding your health care, and how you can reduce the cost of health insurance while still being protected in case of accidents or other medical concerns.
Is health insurance worth the price?
A report from the Kaiser Family Foundation (KFF) found that the average annual premiums for a single worker were $9,325 in 2025, and $26,993 for a family, however, it’s possible for people who are self-employed to pay much higher fees (2).
These high costs are taking a huge bite out of family budgets. Median household income in the U.S. was $83,730 in 2024, per the Census Bureau, meaning health insurance coverage for a family could represent an enormous chunk of pre-tax income for the household.
Insurance costs are also projected to rise in 2026, according to Mercer’s 2025 National Survey of Employer-Sponsored Health Plans (3). The total health benefit cost per employee is expected to swell 6.5% on average in 2026, which marks the highest increase since 2010.
For those who are unemployed, qualifying for COBRA coverage may cause a major strain on already tight budgets, as the cost for coverage can include the full premium plus an admin fee.
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However, the cost of treatment for common health conditions can far outweigh the yearly cost of health insurance, and make opting for coverage worth it. For example, the cost of care for a heart attack patient averaged between $18,970 for survivors and $23,173 for those who died, according to a study published in 2023 (4). The cost of a broken collarbone, according to data collected by Sidecar Health, hovers between $10,000 and $15,000, depending on the state (5). And the price of a one-day hospital stay was $3,132 on average in 2023 (6), per KFF.
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Why uninsured is unprepared
While some Americans may feel priced out of the cost of health insurance, there's the possibility of financial penalties for opting out of coverage. Aside from the major hospital bills if you have an issue like a car accident or cancer scare, insurance is mandated if you live in California, Massachusetts, New Jersey, Rhode Island, Vermont (no penalty) or D.C..
Some experts also worry those without insurance are more likely to put off routine care, which can have serious repercussions for your health in the long run. Missing warning signs of declining health or trying to ignore persistent symptoms can lead to missing out on early-stage treatments that could prevent serious health concerns later on.
If you’re struggling with the cost of health insurance, you do have some options to help you cope and retain your coverage. For example, you can consider:
- Opting for a catastrophic care plan, which can insure against major medical expenses, while limiting primary care.
- Using an HSA or FSA to set aside additional funds for health expenses and to help those funds grow.
- Reviewing your employer’s plan tiers based on your expected medical needs, and looking for preventative wellness discounts
- Checking if you are eligible for ACA Marketplace subsidies, which could make your insurance more affordable
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Federal Reserve Bank of St. Louis (1); Kaiser Family Foundation (2, 6); Mercer (3); National Library of Medicine (4); Sidecar Health (5)
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Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
