Rising Healthcare Costs, Health Insurance, and Medicare

According to a Gallup survey, nearly 100 million Americans are struggling to afford healthcare costs.

A recent Gallup and West Health poll reveals that 38% of U.S. adults (an estimated 98 million people) must choose between healthcare and other basic necessities. Soaring medical costs are forcing individuals to delay or skip medical care, drive less, skip meals, and borrow money.

The latest Gallup survey was conducted in June—the same month the U.S. Consumer Price Index reached 9.1%, marking an all-time high for inflation. Rising healthcare costs are not a new issue. However, inflation is placing additional pressure on the spending and savings of everyday Americans.

Specifically, the survey asked respondents what items they had cut back on over the past six months due to rising prices for goods and services. A striking 70% of participants reported adjusting their spending habits, cutting back in one or more of the following areas:

• Reduced driving (59%)
• Reduced utility expenses (30%)
• Delayed or avoided seeking care or purchasing prescription drugs (21%)
• Skipped meals (19%)
• Took out loans (13%)

Looking Ahead

While several measures have been taken to curb the rise in costs, the reality on the ground is unlikely to change anytime soon. As inflation continues to impact consumer spending habits, Americans will have to keep making tough trade-offs.

Enrolling in Individual Health Insurance

Individual health insurance refers to coverage purchased by an individual or family (typically through the official Health Insurance Marketplace, either “On-Market” or “Off-Market”). Conversely, employees working for companies that offer healthcare coverage enroll through their employer’s group health plan. If an employer does not offer coverage, individuals must purchase insurance on their own. There are two main ways to enroll in individual health insurance:

1. Directly through individual insurance carriers (Off-Market):

Under Off-Market plans, individuals must pay the full premium out-of-pocket, making it essential to shop around for the best coverage at an affordable rate.

2. Through the Health Insurance Marketplace (On-Market):

Under this option, coverage is purchased via government-run exchanges (either state or federal). Based on income, policyholders receive monthly government subsidies to lower their out-of-pocket premiums. When enrolling through the Marketplace, government subsidies are determined using projected annual income; these subsidies are then reconciled against actual income when filing taxes the following year. It is important to note that certain states impose financial penalties for failing to maintain health coverage.

Marketplace health plans are sold and administered by private insurance companies, and all plans cover the 10 Essential Health Benefits mandated by law. These include emergency services, prescription drugs, mental health services, outpatient care, hospitalization and surgery, psychiatric care, preventive screenings, urgent care, maternity care, physical therapy, laboratory tests, and pediatric services (including basic vision and dental care). Furthermore, all Marketplace plans offer free preventive care screenings.

Under the regulations of the Affordable Care Act (ACA), coverage is guaranteed for individuals with pre-existing conditions (such as cancer or diabetes), regardless of prior health status, gender, or age.

Medicare

Medicare is a federal health insurance program for individuals aged 65 and older, as well as qualified individuals of any age with certain disabilities or End-Stage Renal Disease (ESRD / permanent kidney failure). Upon turning 65, individuals apply for Medicare through the Social Security Administration (Social Security Office) to receive their Medicare card (Part A and Part B).

Medicare Part A covers inpatient care in hospitals, skilled nursing facilities, hospice, and home health care. Generally, there is no monthly premium if the individual has worked and paid Medicare taxes for a sufficient period.

Medicare Part B covers medical services not included in Part A, such as doctor visits, outpatient care, and other medically necessary treatments. Part B requires a monthly premium paid to Social Security, which is tied to income (for 2026, the standard amount is $202.90 per month, with higher rates for higher earners).

To cover the coverage gaps in Original Medicare—where Medicare pays 80% of approved costs—individuals often purchase supplemental coverage such as Medigap (Supplementary Plans) to cover the remaining 20%. Individuals who hold Original Medicare must also enroll in Medicare Part D (Prescription Drug Coverage), which is offered through separate, Medicare-approved private insurance companies.

Alternatively, Medicare Advantage Plans (Medicare Part C) are comprehensive healthcare plans offered by government-approved private insurers. These plans bundle Part A (hospital services), Part B (doctor services), and usually Part D (prescription drugs) into a single plan. These plans feature their own copayments, deductibles, and annual out-of-pocket maximum limits.