What Insurers Should Know About The Fragile Nature of The US Healthcare System

With advancements in healthcare resulting in people living longer, populations are growing older in larger numbers, putting additional strain on an already strained healthcare system.

Existing nursing and doctor shortages, and the reclassification of some professional degrees, means we currently do not have enough healthcare providers to meet the demand, and the problem is expected to get worse. The issues in healthcare now will increase exponentially and will continue adversely affecting insurance claims.

People Are Working Longer

Because people are living longer, many are also working longer—some by choice, others out of necessity. Data from the Bureau of Labor Statistics show that between 2023 and 2033, there will be an increase of 22.4% of workers aged 65 to 74. And the number of workers aged 75 and up are expected to increase by 79% during that same period.

According to workers’ compensation data from Gallagher Bassett, in 2024, claims for workers who were 55 years of age and up were more expensive, took longer to close and resulted in a greater number of lost workdays than younger workers. Lost workdays for those age 55-plus ran an average of 45 days for injury compared with 41 days for those between the ages of 45 and 54, 39 days for those between the ages of 35 and 44 and 34 days for those 25 to 34 years of age.

Claim closure rates were also lower among the 55-plus age group at 25%. For the 45 to 54 age group, closure rates were 27%; 30% for those ages 35 to 44; and 36% for those ages 25-34.

With an aging population in the workplace, there is an increased risk of workplace injuries. Further, not all employers offer health insurance, and not all employees qualify for health insurance.

Coupled with a lack of affordability of premiums through the Affordable Care Act, since the subsidies lapsed at the end of 2025, an older worker who may not have been handling their chronic conditions properly may be more likely to be injured on the job. As a result, workers’ comp costs and time needed to return to work are also expected to increase. This often results in frustrated injured workers and cases that may not close depending on the injury. When this happens, litigation also tends to increase.

Insurance And Access

Changes to Medicare and Medicaid, and the expired tax subsidies for the ACA, will hinder the ability for many to pay for their health insurance, creating additional fractures in the delicate system in the U.S. Aside from those no longer in positions to pay for their care, added stress will be felt by hospital systems and other providers.

More than 24 million people were insured through the ACA in 2025. Many have faced significantly higher insurance premiums making their health insurance unaffordable and many more have had to reduce their coverage.

With the rise of urgent care centers, and the establishment of telehealth resulting from the pandemic, access to a medical professional has become somewhat easier. But a patient needs insurance in order to see a provider at one of these care facilities or through telehealth.

The impact of changes to the ACA are just beginning to reverberate throughout the entire healthcare system.

The Emergency Department

The emergency department was traditionally used for life-threatening issues that couldn’t be handled in a doctor’s office and more recently through an urgent care facility. It’s the highest level of life-saving care, and federal law mandates that a person can go into an emergency department and must receive care, despite their insurance coverage status.

For those losing access to their insurance, doctor’s offices, telehealth and urgent care centers will now be unavailable to them and the only place left for treatment will be the emergency department.

Emergency departments have limited capacity to care for patients and weren’t designed to handle significant volume. When the emergency department becomes the only place an uninsured person can go for care, it puts a strain on the services and care available to those with life-threatening emergencies and traumas.

The financial burden of providing the most expensive levels of care to uninsured parties will affect hospital and care costs overall. The staff still needs to be paid, the supplies still need to be replenished and the bill for these things will be passed along to the taxpayers since most hospitals are non-profit and can receive reimbursement for these costs which would be considered charitable care.

Hospital Closures And Consolidations

The landscape for hospitals in the U.S. continues to change. From closures, which are having a significant impact in rural areas, to healthcare system consolidation, these moves are resulting in less access for patients. Numerous institutions have closed, or are seeking to close, obstetric units, given the high liability exposure. And if that wasn’t enough pressure on patients, many healthcare systems are choosing to opt out of PPO networks, further reducing access and increasing the cost of care for patients.

As access to care is being reduced, medical facilities are also increasing reliance on alternative practitioners like nurse practitioners and physician assistants to deliver care, which has shown implication in care outcomes, among other challenges. Consolidation remains a risk as it can lead to quality (and often brand) dilution, further affecting patients.

The Hidden Costs of Not Having Insurance

Without health insurance, patients lose access to their care teams, prescriptions and ability to manage chronic conditions. Managing health conditions like heart disease and diabetes, and keeping up with cancer screenings are more challenging, if not impossible, to manage without insurance and with reduced insurance coverage.

The Healthcare System

Violence against healthcare workers remains a significant issue in the healthcare system and moved from primarily experiences found in behavioral health centers to happening more frequently across care floors, skilled nursing facilities, healthcare provider offices and especially in the emergency department.

Shifting a significant portion of the population to seek health care to the emergency department means the instances of violence are expected to increase. Overcrowded emergency departments will result in increased waiting times. All of this will increase patient and family member frustration, which is often taken out on front line staff. Further, a shortage of emergency department staff will also adversely affect care delivery.

Changes in healthcare coverage through the ACA are having a direct and potentially devastating impact on healthcare for many. Coupled with the existing challenges in healthcare, it will have a ripple effect that will be felt by many for some time.

Bower is the healthcare vertical leader for Gallagher Bassett. Simpson is the executive vice president for worker’s compensation for Gallagher Bassett.