Nearly half of Americans have resolved to save more money in 2026. Unfortunately, many of those New Year’s resolutions are dead on arrival due to skyrocketing health insurance premiums that, starting this month, will eat up a larger share of families’ budgets.
For the roughly half of Americans who get health insurance through their employers, premiums are rising more than 7% this year, on average — far outstripping the pace of inflation or wage growth. For the tens of millions of people who purchase coverage through the Affordable Care Act exchanges, premium hikes were even steeper — up nearly 20%, on average.
Yet, despite paying more upfront in premiums than ever before, American patients, and the employers and taxpayers who often subsidize the cost of premiums, are getting less in return. Insurers frequently limit which doctors, hospitals, and pharmacies patients can use and which medicines they can take.
It’s time for Congress to fix this sorry state of affairs — by ending expensive giveaways to insurers and making it easier for patients to take charge of their own healthcare decisions.
The fundamental problem with our health insurance system is that it’s not truly insurance — it’s a wildly inefficient, expensive, bureaucratic form of prepaid medical care. Health insurers extract huge monthly payments from Americans, and then pay most of it back out to hospitals and doctors each month — but with strings attached on how patients can seek care. A recent Government Accountability Office report found that nearly two-thirds of Obamacare plans failed to meet federal network adequacy standards, leaving patients unable to find in-network doctors or hospitals despite paying for coverage.
Auto and homeowners insurers, by contrast, collect relatively minor upfront payments to protect Americans against only expensive catastrophes, such as accidents or fires.
Drivers don’t involve their auto insurers every time they fill up their vehicles or get their oil changed. And in return, auto insurers don’t dictate what gas stations and mechanics drivers can use.
Homeowners, meanwhile, don’t expect their insurers to pay for a dent in the drywall or a scuffed floor. And insurers don’t pick which paint colors or contractors owners must choose during renovations.
By involving themselves in nearly every healthcare transaction, insurers are able to skim off tens of billions in profit, all while limiting patients’ and providers’ ability to seek and offer the best care possible.
In fact, the status quo incentivizes insurers to focus primarily on enrolling as many people as possible — since they often receive taxpayer-funded subsidies regardless of whether enrollees use their plans or not. Roughly 12 million Obamacare exchange enrollees generate no medical claims in a given year, yet insurers still collect full federal subsidies on their behalf. Many of those enrollees don’t even realize they have coverage, because unscrupulous brokers and self-dealing insurers have enrolled them without their knowledge.
The same perverse incentives plague Medicare Advantage, a program that now covers more than half of all seniors. Insurers boost payments by enrolling healthier-than-average patients and then inflating diagnoses to make them appear sicker. This “upcoding” entitles insurers to higher payments from taxpayers.
At the same time, Medicare Advantage insurers increasingly attract enrollees by offering perks unrelated to healthcare, from ski passes to golf clubs, while narrowing their provider networks. According to the Committee for a Responsible Federal Budget, this behavior could help insurers reap more than $1 trillion in overpayments by 2034.
EDITORIAL: AN UNWISE PROSECUTION OF POWELL
Restoring consumer control means giving patients more say over how they spend their healthcare dollars. That starts with expanding health savings accounts, which enable patients to use their own, untaxed money to shop around for the doctors, drugs, tests, and procedures that are best for them — without having to constantly seek approval from an insurer or route routine purchases through a corporate behemoth.
Rising premiums will continue to blow up families’ budgets unless Congress resolves to curb the influence of the nation’s largest insurers and devolves control to consumers and providers.
Robert Goldberg, who has a doctorate in politics, is co-founder and vice president of the Center for Medicine in the Public Interest.