Insured Americans face debt and bankruptcy after injury, raising questions for risk planning
US health insurance is supposed to protect households from shocks. Right now, several parts of the US system are amplifying risk instead – especially for older adults and injured patients.
Nearly 3 million Americans in Medicare Advantage – about 10 percent of all enrollees in the private side of the US Medicare program – had to find new coverage for 2026 as insurers exited markets or cut back options, according to Reuters, citing a study in JAMA.
Rural Americans took the biggest hit.
Members in rural areas experienced plan disruptions at about twice the rate of those in cities, raising concerns about access to providers, specialists and long-term treatment, the JAMA study found.
According to Reuters, seven US states saw more than 40 percent of Medicare Advantage members affected, with Vermont at 92 percent.
The US federal Medicare program covers around 60 million Americans aged 65+ or living with disabilities, and roughly half of them use privately managed Medicare Advantage rather than traditional government-run Medicare.
Insurers had already warned this was coming. In 2025, they reported plan shortfalls as costs rose and government reimbursements fell, and they signalled plans to pull back or shift markets in 2026.
Smaller carriers accounted for about half of the disrupted enrollees, but the biggest US players also drove a large share of the turmoil.
UnitedHealthcare, part of UnitedHealth Group, accounted for nearly 14 percent of disruptions, while CVS Health’s Aetna unit and Elevance were responsible for about 8.65 percent and 8 percent respectively, according to Reuters’ summary of the study.
Plans that had offered broader provider choice were the most likely to disappear.
In an editorial accompanying the JAMA study, RAND Corporation policy researcher Hannah James argued that the US payment model – where government pays private insurers on a pre-negotiated basis – encourages them to seek more profitable patients.
James wrote that “Policymakers should consider whether the current program design adequately aligns plan incentives with beneficiary needs,” as cited by Reuters.
Market concentration adds to that risk.
In 2025, UnitedHealthcare controlled nearly one-third of all US Medicare Advantage plans, with Humana at 17 percent, CVS Health at 12 percent and Elevance at 7 percent, according to health policy firm KFF.
Older Americans increasingly rely on a concentrated set of private players for core health coverage, and when margins compress, product risk can quickly become client risk.
At the same time, a political fight over US public health infrastructure is adding another layer of uncertainty.
California, Colorado, Illinois, and Minnesota have sued in US federal court in Chicago to block the Trump administration from terminating US$600m in public health grants.
The four Democratic-led states argue in their complaint that they face “devastating funding cuts to basic public health infrastructure based on political animus and disagreements about unrelated topics such as federal immigration enforcement,” according to Reuters.
A spokesperson for the US Department of Health and Human Services said the grants are being terminated because they do not reflect the agency’s priorities, but HHS did not immediately comment on the lawsuit.
The grants, administered through the US Centers for Disease Control and Prevention, fund health-threat monitoring, outbreak response and emergency planning, including HIV prevention and surveillance.
California Attorney General Rob Bonta called it a “familiar playbook,” saying US President Donald Trump is using federal funding to push states to follow his agenda and predicting that courts will again block the effort, according to Reuters.
Even when Americans have coverage, serious injury can still lead to lasting financial damage.
A study in Health Affairs cited by CNBC found that 18 months after hospitalisation for traumatic injury – such as a car crash or a fall – the share of US patients with medical debt in collections rose by 5.2 percentage points, a 24 percent relative increase compared with before the injury.
Over that same period, the average balance in collections increased by US$290, and one in 10 indebted patients owed more than US$4,480.
Bankruptcy also rose. About 15 months after injury, bankruptcy filings increased by 3.2 per 1,000 patients, a 6 percent relative rise.
Co-author John Scott, an associate professor of surgery at the University of Washington, said his work grew out of his clinical experience as a trauma surgeon. He recalled “acutely injured patients shouting at us to stop care because they’re worried about the bill,” in comments to CNBC.
Researchers tracked credit reports for nearly 13,000 trauma patients from one year before to 18 months after hospitalisation between 2018 and 2021. Almost all – 98 percent – had health insurance.
Scott told CNBC that “Insurance reduces the risk of financial catastrophe, but the way private plans are currently designed still leaves many people heavily exposed when something serious happens.”
CNBC, citing a KFF poll, also reported that 66 percent of Americans worry about paying for health care – more than utilities, food, housing or rent.
High deductibles in US private plans sit at the core of that exposure.
In 2026, the average marketplace deductible is US$5,304 for a silver plan and US$7,186 for a bronze plan, KFF found.
“An unexpected injury can mean thousands of dollars in out-of-pocket costs before insurance pays a dime,” Scott said.
Caitlin Donovan, senior director at the National Patient Advocate Foundation, told CNBC the study showed “the utter failure of private insurance to protect people from debt and bankruptcy,” and argued for tighter limits on deductibles or income-based caps on out-of-pocket costs.
Outcomes looked different for patients on US public programs. Trauma patients on Medicare and Medicaid saw minimal changes in medical debt and bankruptcy, the researchers found.
Scott said Medicaid’s minimal out-of-pocket costs and capped Medicare expenses help explain the gap.
“If insurance is supposed to protect you from financial ruin after a health shock, Medicaid did its job,” he said, while “private insurance, for many people, did not.”
