When Insurance Costs More Than Care

The Palliative Lens

By Andrew Esch, MD

Are we approaching the point where health insurance is so expensive that it makes more sense to self-pay?

Not “go uninsured and hope for the best.”

I mean something more deliberate and more telling:

·       Pay cash for routine care, imaging, labs, and straightforward procedures

·       Use a membership model for primary care (DPC or concierge-lite)

·       Carry catastrophic coverage for the true financial disasters — ICU stays, cancer, trauma, NICU

Because what many families are quietly discovering is this:

Insurance increasingly feels like an expensive coupon book that doesn’t show prices, doesn’t guarantee access, and still leaves you paying thousands out-of-pocket.

What Health Insurance Actually Costs Families

Let’s start with employer-sponsored coverage, where most insured Americans live.

In 2025, the average annual premium for employer-sponsored family coverage reached $26,993. Workers paid $6,850 out of pocket toward that premium. (Kaiser Family Foundation)

Even if your employer “pays most of it,” that money is still part of your compensation. It is part of what it costs to employ you. It could otherwise be wages.

And then there’s cost sharing:

·       87% of covered workers are in plans with a deductible

·       The average single deductible is $1,787, often higher in small firms

So the lived experience becomes:

Pay thousands every year → delay care because of deductible → pay thousands more when you finally go.

Meanwhile, 92% of Americans technically have insurance.

So why does it feel like so many people are functionally on their own?

What You’re Supposed to Get

To be fair, insurance still provides:

·       Protection from catastrophic costs (if you stay in-network, meet criteria, clear prior auth hurdles)

·       Negotiated network rates

·       Preventive service mandates

But the day-to-day experience is driving the revolt:

·       You can’t get a straight answer about price

·       You can’t get a straight answer about coverage

·       You can’t get timely access

·       You spend hours arguing with people who have never met the patient

·       And even “covered” care can destabilize your finances

Families aren’t irrational for asking: What exactly am I buying?

Follow the Incentives

Now look at who is thriving inside this system.

Recent reported total compensation for top executives at major insurers:

Company	Approx. Total Compensation
UnitedHealth Group	~$60M stock + ~$1M salary (2025 award)
UnitedHealth (prior CEO)	~$26.3M
Cigna	~$23.25M
Molina Healthcare	~$22M+
CVS Health (Aetna)	~$21M+
Elevance Health	~$20.5M+
Centene	~$20.6M
Humana	~$15.6M
BCBS Michigan	~$13.9M

These compensation packages are largely tied to:

·       Earnings growth

·       Medical loss ratio control

·       Cost containment

·       Shareholder return

In plain terms:

Executives are financially rewarded when less money goes out the door for patient care and more remains for margin.

That doesn’t require villainy. It’s structural.

But it does mean that when families experience:

·       Denials

·       Delays

·       Narrow networks

·       Administrative friction

·       Cost shifting through deductibles

That experience is not separate from executive compensation.

It is mathematically linked to it.

Why Self-Pay Is Sometimes Cheaper

Here’s the part that should make policymakers uncomfortable:

There is growing evidence that hospital cash prices are sometimes lower than insurer-negotiated rates. (Johns Hopkins Bloomberg School of Public Health; JAMA Health Forum)

That means an insured patient paying toward a deductible can end up paying more than someone who simply asks for the cash price.

Why?

Because insurance pricing isn’t built around patients as customers.

It’s built around contracts.

Cash pay is simple:

·       One buyer

·       One price

·       Payment at time of service

·       Less administrative overhead

·       Faster scheduling

·       Fewer billing layers

Self-pay behaves like a market. Insurance behaves like a contract maze.

Transparency Exists — On Paper

Hospitals are required (since January 1, 2021) to publish machine-readable files of standard charges and “shoppable services.” CMS strengthened those requirements in 2024.

Yet HHS Office of Inspector General audits estimate that 46% of hospitals were non-compliant with price transparency requirements.

The data may technically exist but it is not usable by normal families trying to price a colonoscopy. The Transparency in Coverage rule requires insurers to publish negotiated rates. But those files are enormous, fragmented, and effectively unusable without analytics software.

So transparency exists, Just not at the moment when patients need it.

In Serious Illness, the Friction Becomes Suffering

This is where I stop being abstract.

In cancer

In advanced heart failure

In ALS

In pediatrics

Insurance complexity becomes its own form of harm.

Families facing life-limiting illness should not have to:

·       Fight prior authorizations

·       Decode EOBs

·       Appeal denials

·       Compare invisible prices

·       Beg for records

Administrative burden becomes part of the disease experience.

And when the system financially rewards cost suppression while families shoulder distress, that’s not neutral. That’s misaligned.

Are We Nearing a Self-Pay Tipping Point?

For relatively healthy families needing:

·       Primary care

·       Routine labs

·       Imaging

·       Minor procedures

The math increasingly favors:

1.     Catastrophic coverage

2.     Direct primary care memberships ($50–$100/month typical range per AAFP)

3.     Cash pay for routine services

4.     HSA buffering

People aren’t rejecting healthcare, they’re rejecting a financing system that:

·       Extracts enormous premiums

·       Hides prices

·       Adds friction

·       And still leaves them exposed

What Would Real Reform Look Like?

If we were serious, we would enforce:

·       Real price estimates before care

·       Usable transparency data

·       Meaningful penalties for noncompliance

·       True interoperability and note access

·       Executive compensation tied to access, outcomes, and transparency, not just margin

Until then, families will continue doing what rational people do.

They will route around the system whenever possible.

And they will keep asking:

Why am I paying nearly $7,000 out of my paycheck, plus thousands more, while the people running this system are paid $20–60 million a year to keep costs down?

That question isn’t populist.

It’s economic.

And it’s increasingly hard to ignore.