Millions Of Americans Are Canceling Health Insurance Because They’re Paying Thousands Before Coverage Even Starts
Adrienne Hulme | ShutterstockIn August of 2025, I got laid off from a part-time position and lost my health insurance. On one hand, I’m a freelance writer and journalist, so it’s a miracle I had insurance at all. I’m also relatively healthy and rarely go to the doctor. On the other hand, I’m not exactly a spring chicken anymore, and it never hurts to be prepared.
After reading through my termination paperwork (which finally arrived in my mailbox six months later), I called COBRA to ask how much it would cost to extend my coverage until I could find something else.
“It’ll be about $650 a month for your previous $4,000 deductible,” the representative told me, “but you can’t have a lapse in coverage, so you’ll need to retroactively pay for the last six months, too.”
I pulled up the calculator on my laptop and crunched some numbers. “So I’ll need to pay almost $4,000 to get back on my health insurance, $650 a month from here, and another $4,000 out of pocket before it even kicks in?”
“That’s correct. You have until January 21st to decide.”
“Okay. Thank you. I’ll think about it.”
I hung up the phone. I barely thought about it. I let my coverage lapse. I’ve been uninsured ever since.
Millions of Americans are canceling health insurance because they're paying thousands before coverage even starts
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I’m not the only American who gave up on health insurance
In January 2026, when Congress let Obama’s health insurance subsidies expire, countless Americans saw their premiums double. By the end of February, 1.5 million people had canceled their health insurance, joining the estimated 27 million US citizens without coverage.
Dr. Deibel was one of them.
Philip Deibel is a physician and the founder and CEO of D5 Health. He also has a wife and three children. For a family of five, he was paying almost $2,000 a month for the cheapest catastrophic plan, which had an $8,000 deductible.
In 2026, the premium jumped up another $200 a month.
“The decision came down to cost versus value,” Dr. Deibel said. “Our family was paying more than $21,000 a year for a high-deductible plan that still required us to spend thousands out of pocket before coverage even started.”
As a consumer, Dr. Deibel was forced to step back and reconsider his family’s options. As a physician, he had insider knowledge that made his decision a little easier.
According to Dr. Deibel, most Americans have no idea what healthcare actually costs, because “insurance sits between patients and the price.”
Patients assume insurance makes healthcare cheaper, but that’s not always the case, especially if you have a high-deductible plan where you’re footing all the bills, anyway.
In his private practice, Dr. Deibel has seen firsthand how insurance markups often make healthcare more expensive, not less:
“The same lab test or imaging study can cost several times more when billed through insurance than when someone asks for the cash price. For example, a specific test might cost $8 as a cash-pay, but Labcorp will bill insurance $100 for that same test. Then they will ‘adjust’ it down to the allowable amount of $10 and claim that they saved the patient 90%! In actuality, it cost 20% more than if ordered as cash-pay.”
After witnessing these price discrepancies, Dr. Deibel started questioning the value, transparency, and efficiency of the current system.
He opted not to renew his family’s traditional health insurance plan for 2026.
Dr. Deibel is now using a combination approach that cuts healthcare costs by merging different programs and tactics
For part of the year, his family has a short-term catastrophic policy. For the rest of the year, he’s using a healthcare cost-sharing program. For routine care, Dr. Deibel pays the cash price. (More on all of these options below.)
“I want to be clear that I’m not suggesting everyone should cancel their health insurance,” Dr. Deibel said. “Everyone’s situation is different,” so you’ll need to weigh your risk tolerance, personal health needs, and financial situation.
According to Dr. Deibel, if you’re planning a pregnancy or you have chronic conditions, traditional insurance is likely still the safest option, especially since alternative programs don’t always cover pre-existing conditions.
But for those who simply can’t afford traditional health insurance anymore, you can protect yourself (and your family) using alternative options.
Affordable alternatives to health insurance
1. Short-term catastrophic policies.
Short-term health insurance covers you for a portion of the year, usually for a few months, and catastrophic plans have high deductibles that kick in after a certain amount. If you have a medical emergency that costs tens of thousands of dollars, these plans protect you from going bankrupt.
For part of the year, Dr. Deibel has a short-term catastrophic policy that covers his family in worst-case scenarios, such as accidents, hospitalizations, and emergency surgeries.
He opted for a $500-a-month plan that kicks in after they’ve spent $5,000 out of pocket, but some catastrophic plans start as low as $250 a month
2. Healthcare cost-sharing programs
A healthcare cost-sharing program is a non-insurance organization in which “members contribute monthly, and large medical expenses are reimbursed once they exceed a set amount, similar to a deductible,” Dr. Deibel said.
This set amount is called the initial unshareable amount (IUA). After their short-term catastrophic policy expires, Dr. Deibel’s family plans to use a healthcare cost-sharing program that kicks in after $5,000. Vaccines and preventative screenings, like mammograms and colonoscopies, are often covered.
For individuals, IUAs may be as low as $300 to $500 out of pocket, making them much more affordable than traditional insurance deductibles.
3. Cash pricing
As previously discussed, traditional insurance plans often drive healthcare costs up. Hospitals, clinics, and doctors usually offer discounts to patients without insurance.
For routine care, Dr. Deibel pays the cash price, which is often “surprisingly affordable.” That includes dental appointments and routine visits for his children.
My partner has been uninsured for years, and I was stunned to see that he paid significantly less than I did for his wisdom teeth removal — even though I’d had insurance when I got mine out. He also pays a shockingly low price for doctor’s visits and prescription medications.
4. Direct primary care memberships
According to Dr. Deibel, Americans are also exploring direct primary care (DPC) memberships as an alternative to traditional health insurance.
Similar to other monthly subscriptions (like Netflix or Spotify), you pay a flat monthly rate and use the service as often as you want or need.
While coverage differs depending on the provider, you usually get unlimited access to most primary care services, including doctor visits, chronic disease management, minor procedures, labs, and medications. Typically, these memberships cost between $55 to $150 a month per person.
5. Medical tourism
Each year, millions of Americans travel to other countries to receive medical care. It’s called medical tourism. Treatments and procedures (including dental care, cosmetic surgeries, fertility treatments, and cancer treatments) may cost 40% to 80% less, even when accounting for travel and lodging.
That said, medical tourism can be risky, so do your research. The CDC recommends that you confirm the clinician’s qualifications, book pretravel consultations, prepare for language barriers, bring copies of your medical records, and fully research any necessary follow-up care.
High-yield savings accounts
Last year, I met a physical therapist at a Christmas party. Somehow, we started talking about health insurance, and I told her I’d just lost mine.
“That’s fine,” she said. “It barely covers anything, anyway.”
She advised me to take the money I was previously spending on insurance premiums and put it in a high-yield savings account. That way, I had money saved in case of a medical emergency — but unlike giving it away to an insurance company, I was making 3.3% back, and if I didn’t end up using it, it was mine to keep.
That’s exactly what I’ve been doing. Is it risk-free? Not at all, but I can no longer afford to give 10% of my income to a company that barely holds up their end of the bargain, anyway.
Private health insurance is a broken system
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In my opinion, it benefits the executives and the shareholders, not the citizens it’s supposed to serve. After all, if there was no profit to be made, we wouldn’t have middlemen in the first place.
Between 2001 and 2022, healthcare corporations funneled at least $2.6 trillion away from patient care and into shareholders’ pockets.
Meanwhile, policyholders diligently pay their premiums and co-pays, drown in confusing paperwork, hunt for in-network providers, contest denied claims, wait for referrals and prescriptions, and plead for life-saving care.
Something has to give. To me, it is simply unacceptable that citizens of the richest country in the world are forced to crowdfund their hospital invoices and cancer treatments on TikTok.
“As a physician, I think the bigger conversation we should be having is how to make healthcare more transparent, affordable, and patient-centered,” Dr. Deibel said. “When patients can see prices and make informed decisions, it creates a system that works better for everyone.”
Well, everyone except the shareholders, of course.
Maria Cassano is a writer, editor, and journalist whose work has appeared on NBC, Bustle, CNN, The Daily Beast, Food & Wine, and Allure, among others. She's in the process of publishing her memoir.
