1 in 4 Americans Face Major Health Care Costs Within Four Years: A Deep Dive Into Out-of-Pocket Financial Burdens

In December 2025, JAMA Internal Medicine published a groundbreaking study titled Risk of Burdensome Health Care Spending Over Time in the United States. Led by Adam Gaffney, Danny McCormick, Samuel L. Dickman, and their colleagues, the research provides a detailed view of the financial pressures Americans face when accessing health care. Unlike traditional studies that examine spending for just a single year, this research tracks individuals over four years to show how the risk of financial burden accumulates over time. The findings reveal that health care costs are not just an occasional concern for some families. For millions of people, financial strain is a persistent challenge that grows steadily over time.

Most discussions about health care spending focus on total national expenditure or insurance premiums. While those numbers are important, they often fail to capture the lived experience of Americans navigating the cost of care. This study approaches the problem from a different angle. It looks at the actual financial consequences faced by individuals and families over multiple years. The result is a more accurate understanding of the real impact of health care spending in the United States.

Understanding Burdensome Health Care Spending

Before diving into the findings, it is essential to understand how the researchers defined burdensome health care spending. The study examined four measures. The first is cost burden, which occurs when a family's out-of-pocket medical spending exceeds ten percent of their income or five percent for low-income families. The second is catastrophic cost burden, which happens when medical expenses exceed forty percent of income remaining after basic living expenses. The third is foregone care due to cost, meaning instances in which individuals did not receive medical care because they could not afford it. The fourth measure considers the impact of these costs at the family level. By examining these measures over four years, the study provides a comprehensive picture of how health care spending affects households financially.

A Snapshot of the Findings

The results are eye-opening. After just one year, about 6.5 percent of adults experienced a cost burden, and 3.5 percent faced a catastrophic burden. These numbers alone are significant, but the multi-year perspective reveals a much larger problem. Over four years, 17.4 percent of adults experienced a cost burden at least once, and 9.9 percent experienced a catastrophic cost burden at least once. At the family level, nearly a quarter of all families experienced some form of cost burden during the four-year period.

When including foregone care due to cost, approximately 26.7 percent of adults experienced at least one form of financial strain over four years. This means that more than one in four Americans faced either high out-of-pocket costs or had to skip medical care because they could not afford it. These numbers highlight that financial strain is not a rare occurrence. It is a widespread issue affecting millions of families in the United States.

Who Is Most at Risk

The study also identifies specific populations that are at higher risk for financial hardship due to health care costs.

Low-income individuals are particularly vulnerable. Even relatively small medical expenses can constitute a significant portion of their income, creating substantial financial strain. Lack of insurance coverage also dramatically increases risk. People without insurance are more likely to experience high out-of-pocket costs and to forgo care due to cost.

Chronic illness and hospitalization are additional risk factors. Individuals with long-term health conditions or those who require hospital care are exposed to higher medical expenses. This population is not only more likely to need care but also more likely to experience financial strain when paying for it.

The study also highlights the financial burden faced by individuals near the end of life. More than half of those who died during the study period experienced cost burdens in the years before their death. This finding underscores the heavy financial toll of medical care during terminal illness and end-of-life care.

Why Financial Burden Matters

The consequences of high out-of-pocket costs extend beyond financial hardship. Foregone care due to cost can lead to worse health outcomes. When individuals skip medications, delay procedures, or avoid doctor visits because of cost, their health risks increase. Financial strain can create a vicious cycle in which avoiding care to save money today results in more severe health problems tomorrow.

Family dynamics are also affected. When one member faces significant medical expenses, the financial stability of the entire household can be compromised. Families may cut back on essential spending, accumulate debt, or face long-term financial insecurity as a result.

The end-of-life findings are particularly concerning. Families often face intense emotional and financial pressure when caring for a dying loved one. The study shows that many families also face heavy medical bills during this period, compounding the stress and financial strain of end-of-life care.

Policy Implications

The findings of this study have significant implications for health policy. Policymakers and stakeholders can take steps to reduce financial hardship and protect families from excessive medical costs.

Expanding insurance coverage is one of the most straightforward ways to reduce risk. While no insurance plan is perfect, coverage helps protect families from catastrophic out-of-pocket costs and increases access to essential medical care. Policies that provide affordable, comprehensive insurance options are essential to reduce financial strain.

Another approach is to limit out-of-pocket expenses for essential care. Caps on annual spending or reductions in copays and deductibles can make care more accessible and prevent families from facing financial ruin. Targeting high-cost services, such as prescription medications and hospital care, for cost reduction can also relieve financial pressure.

Protecting families from surprise medical bills is another critical step. Unexpected charges from out-of-network providers can be devastating for households. Policies that ensure transparency and limit these unexpected costs can help families maintain financial stability.

Finally, addressing systemic cost drivers within the health care system is essential. High drug prices, administrative inefficiencies, and high hospital costs contribute to the financial strain experienced by patients. Tackling these issues can reduce overall health care costs and prevent financial hardship for millions of Americans.

The Broader Perspective

This study highlights the stark difference between the U.S. health care system and systems in other high-income countries. In much of Europe, Canada, and other countries, financial hardship from necessary medical care is rare. Basic medical services are either publicly funded or heavily subsidized, preventing individuals and families from facing catastrophic costs.

In the United States, the reality is different. Health care spending is a gamble for many families. While some may experience no significant costs in a given year, the longer people live under the current system, the more likely they are to face financial hardship. The multi-year perspective offered by this study reveals the true extent of the problem.

Taking Action

The Risk of Burdensome Health Care Spending Over Time in the United States study is a call to action. It demonstrates that financial hardship due to medical costs is common, predictable, and closely linked to health care needs. This is not just a statistic. It represents millions of families struggling to balance medical care with financial stability.

Health care reform should focus not only on access and quality but also on financial protection. Policymakers, health care providers, and communities must work together to create systems that ensure Americans can receive the care they need without risking their financial security.

Affordable health care should be a right, not a privilege. No family should face financial ruin for seeking necessary medical care. By implementing policies that reduce cost burdens, expand coverage, and protect families from financial shock, the United States can create a health care system that truly serves its people.

Conclusion

This study offers critical insight into a problem that affects millions of Americans. Over four years, more than one in four adults experienced financial hardship due to medical costs. The risk is especially high for low-income individuals, the uninsured, people with chronic conditions, and families facing end-of-life care.

Financial strain from health care is not just a personal problem. It affects families, communities, and the broader economy. By understanding the scope of the issue and implementing effective policies, we can reduce burdensome spending and ensure that all Americans have access to necessary medical care without facing financial catastrophe.

The research reminds us that health care spending should not be a gamble. It should be a safety net, a source of support, and a pathway to better health. Addressing the hidden costs of care is a moral, social, and economic imperative. Every American deserves a health care system that protects both their health and their financial well-being.

Source: A. Gaffney et al., “Risk of Burdensome Health Care Spending Over Time in the US,” JAMA Internal Medicine, Dec. 2025.

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