The United States faces a healthcare affordability crisis

The cost of healthcare is financially unsustainable for many American households. A nationally representative Commonwealth Fund survey in 2023 found that more than 50% of the 6121 respondents of working age struggle to afford their healthcare.1 Millions of Americans are in medical debt, often with devastating financial and health consequences. Nearly 18% of Americans had medical debt in 2020.2 Medical debt is concentrated among the sickest and most socially disadvantaged populations, including racial and ethnic minorities and people without insurance coverage.3 Policy reforms in the US have helped to improve healthcare affordability and alleviate debt, but emerging policy directions could undermine these recent gains.

Over the past two decades, policy makers have implemented initiatives aimed at decreasing the cost of healthcare and catastrophic health expenditures. The Affordable Care Act is one of the most extensively studied reforms. This landmark law expanded Medicaid eligibility—the public insurance programme for Americans with a low income—to millions of working age adults (aged 19-64 years) with family incomes below 138% of the federal poverty level. Multiple studies have shown that Medicaid expansion significantly reduced the uninsurance rate as well as uninsured hospital admissions, resulting in substantial declines in out-of-pocket spending and financial toxicity among working age adults with a low income.45678 More recently, the Inflation Reduction Act introduced major provisions to lower prescription drug costs in Medicare—the public insurance programme for older adults and people with disabilities. The main provisions include an annual $2000 (£1493; €1716) cap on out-of-pocket drug costs and giving Medicare the authority to negotiate prices for select high cost medications for the first time.910 Taken together, a robust body of evidence shows that these major policy reforms have led to improvements in healthcare affordability.

Other threats to healthcare affordability remain in the US, including surprise billing—a longstanding driver of medical debt. Patients receive unexpected bills for care delivered by providers or facilities that do not contract with their insurance company and are considered “out of network.” This often occurs when patients seek emergency treatment at out-of-network hospitals, or unknowingly receive services from out-of-network providers at facilities within the patient’s insurance network.11 Nearly one in five insured Americans have received a surprise medical bill in the past two years.12 These charges can exceed thousands of dollars because they are not subject to usual out-of-pocket maximums that apply to services delivered by providers within an insurance network.

Given concerns of substantial financial toxicity resulting from surprise billing, the bipartisan No Surprises Act was signed into law on 27 December 2020 and took effect on 1 January 2022.13 The central tenet of the legislation is to protect patients from surprise billing across three key areas: out-of-network emergency services, out-of-network non-emergency care received at in-network facilities, and air ambulance transportation. These protections generally apply to all forms of private insurance, including employer sponsored and direct purchase plans.

In our study (doi:10.1136/bmj-2025-084803), we used a quasi-experimental design to provide the first estimates of the impact of the No Surprises Act on patient healthcare spending outcomes.14 We found that the No Surprises Act significantly reduced out-of-pocket spending among adults with direct purchase private insurance who gained surprise billing protections. Average out-of-pocket spending declined by ~$600 after implementation of the act, a figure that likely underestimates the savings among those who would have been directly exposed to surprise bills.

Despite the significant reduction in out-of-pocket spending, the prevalence of high burden medical spending (defined as families spending more than 10% of their income on healthcare costs) did not change after the No Surprises Act. This suggests that the law did not meaningfully reduce population level financial toxicity associated with medical bills. Refinements in the design of the No Surprises Act may enhance its effectiveness, particularly by extending coverage to include ground ambulance services and strengthening enforcement mechanisms for non-adherent providers. Policy makers will also need to consider complementary strategies across other domains to improve healthcare affordability, such as health insurance design, price regulation, and care delivery transformation.1516

Unfortunately, recent policies enacted in the US threaten to reverse the gains made under previous reforms that helped make healthcare more affordable. The One Big Beautiful Bill was signed into law in July 2025 and will cut federal spending on Medicaid by $1tn over the next decade. This will undoubtedly undermine the improvements in healthcare access and affordability that occurred with Medicaid expansion under the Affordable Care Act. Preliminary projections estimate that the One Big Beautiful Bill could be responsible for 11.8 million Americans losing insurance coverage over the next 10 years and result in 51 000 preventable deaths each year.1718 Researchers and policy makers must closely monitor the impact of the One Big Beautiful Bill on patient healthcare spending, access to care, and health outcomes. The current policy direction is moving away from evidence based approaches and will likely result in less affordable healthcare for millions of Americans.

The success of recent reforms such as the Affordable Care Act and the No Surprises Act shows that evidence based policies can meaningfully improve healthcare affordability.1920 However, the US risks losing hard won progress without sustained investment in coverage and patient protections. The cost of pursuing a policy path that abandons vulnerable patients will be measured not only in crushing healthcare costs and rising medical debt, but in the number of lives lost.