Why Health Insurance Is So Expensive Now: A Look Back at 1973 and What You Can Do Today

Open enrollment may be behind us (unless you’ve had a qualifying life change), but I’ve been having the same conversation over and over with clients—and it’s time to shed light on something that surprised me.

This year, everyone’s talking about premium increases—especially for HMOs—and it’s been painful to watch how unaffordable coverage has become, even for basic plans. So, I did some digging.

Did You Know Health Insurance Used to Be Nonprofit?

Before 1973, nearly all health insurance companies were nonprofit. Then came the Health Maintenance Organization (HMO) Act of 1973, passed under the Nixon administration. This law allowed insurance companies to adopt the HMO model and operate as for-profit entities for the first time.

At the time, the goal was to cut costs and increase access. But what actually happened?

Since then, data shows a sharp, steady increase in health insurance costs—every single year. Profitability, not patient care, became the focus. And now, here we are in 2026… with $3,000–$4,000 monthly premiums for some families and deductibles pushing $11,000, even on so-called “catastrophic” plans.

Why This Legislation Still Matters Today

When people ask, “Why can’t health insurance be like it used to be?”—this is why.

Some would argue the entire HMO model should go. I don’t necessarily think HMOs are the problem on their own. In fact, they work better now than they used to. But here’s the issue:

For-profit health insurance has drastically driven up the cost of care.

And it’s hurting real families. I’ve had clients forced to choose which family members can even afford to stay on coverage. Some wonder if they should drop insurance entirely.

The “Catastrophic Coverage” Myth

I get a lot of questions about catastrophic plans. But here’s the truth: those aren’t what they used to be.

In the past, catastrophic plans were low-cost and kicked in only for serious emergencies. Now, even those plans must cover screenings and maintenance meds—and they’re still expensive. Some have $11,000+ deductibles and cost almost as much as more comprehensive plans with copays.

So are they cheaper? Slightly, in some cases. But not significantly. It’s honestly mind-blowing.

What You Can Do (Especially If You’re Healthy)

If your family is enrolled in an ACA plan and paying thousands in premiums—but no one has preexisting conditions—please reach out.

There may be other options to help lower your monthly cost.

✅ I’ve already helped two families this month move healthy family members off their ACA plan, while keeping one member (who needs full ACA coverage) on the existing policy.

✅ This saved those families hundreds—and in some cases, thousands—while still keeping everyone insured.

This is a legal, strategic, and effective way to reduce your healthcare costs without sacrificing coverage.

What’s Next

I’ll dive deeper next week into alternative coverage options for healthy individuals. But in the meantime, if your family premiums are feeling unsustainable, book time on my calendar. Let’s see if we can restructure things in a smarter way.