By Peter Reagan
Retirement planning has a cruel little habit: The expenses that are hardest to predict are often the ones we have the least power to avoid.
A vacation can be postponed. A new car can wait another year. You can eat out less often or skip the kitchen remodel.
A necessary prescription, medical test or hospital visit is different.
That is what makes healthcare such a difficult retirement expense. We know we are likely to need more of it as we get older. We just don’t know how much we will need – or how much it will cost when the bill arrives.
New health-insurance figures offer a troubling reminder of just how quickly that retirement math can change.
A difficult gap before Medicare
Let’s begin with an important distinction.
Most Americans become eligible for Medicare around age 65. The Affordable Care Act (ACA) marketplace is especially relevant to people who retire before then and lose their employer-sponsored coverage.
That creates a potentially expensive gap.
Imagine retiring at 62. You have spent decades saving carefully. You have calculated your mortgage, groceries, utilities and other regular expenses.
Then the price of covering your healthcare during the three years before Medicare rises far faster than you anticipated.
That is not a theoretical concern.
The Associated Press recently reported that the typical ACA marketplace plan rose 20% in 2026. Now insurers are proposing an increase of another 14% on average in 2027.
Those 2027 figures are preliminary. They come from publicly available filings submitted by 77 insurers across 16 states and Washington, D.C. Final increases may be higher or lower.
Even so, KFF estimates that, if the proposed increases hold, typical marketplace premiums will have risen by more than one-third between 2025 and 2027.
That is a remarkable increase for any household expense.
For someone living on a fixed or carefully managed retirement income, it can be a serious disruption.
Not everyone pays the sticker price
There is another distinction we need to make.
A 20% increase in insurance premiums does not mean every marketplace enrollee personally paid 20% more. Most ACA enrollees still qualify for subsidies that offset at least part of the cost.
But the expiration of enhanced pandemic-era tax credits created a particularly difficult situation for middle-income households.
According to KFF, people with incomes at or above 400% of the federal poverty level (about $62,600 for one person) lost those enhanced subsidies entirely. They’ll probably have to pay the full premium increase.
That can describe an uncomfortable type of early retiree: Not poor enough to qualify for the greatest assistance, but certainly not wealthy enough to shrug off a double-digit increase in one of life’s most essential expenses.
In fact, there is a strange financial penalty hiding here.
A family may do everything we encourage retirees to do. Work hard. Save consistently. Build a responsible cushion. Retire without expecting the government to cover every expense.
Then they discover that having a little too much income to qualify for assistance can make private health insurance dramatically more expensive.
That is not a reason to avoid saving, of course. But it is a reason to recognize that retirement costs do not always rise gradually or predictably.
Sometimes they leap higher.
What is pushing healthcare costs higher?
It would be easy to turn this into a simple morality play.
Some people will blame insurers. Others will blame hospitals, pharmaceutical companies, government regulators or the Affordable Care Act itself.
There are legitimate questions about profits, market concentration and administrative waste throughout the healthcare system. Regulatory review does not automatically prove that every proposed increase is unavoidable.
But blaming a single villain would also miss the larger story.
In their filings, insurers identified several specific pressures:
Higher hospital and physician costs
More expensive prescription drugs, including specialty medications
Labor shortages and rising healthcare wages
General inflation
Regulatory changes
A smaller and less healthy group of marketplace enrollees
KFF estimates that the underlying cost of medical care and prescription drugs is increasing by about 10% for 2027, compared with average growth of around 8% during the last several years.
The expiration of enhanced subsidies has also caused some healthier, more price-sensitive people to leave the marketplace. That leaves behind a smaller population that, on average, requires more medical care.
Insurers estimate that this deterioration in the covered population added roughly four percentage points to 2026 premiums – and could add another four points in 2027.
In other words, rising premiums can drive healthier customers away. Their departure makes the remaining insurance pool more expensive. That pushes premiums higher again, encouraging still more people to leave.
That is a vicious cycle, not a one-time price adjustment.
Healthcare is nearly 20% of the economy
ACA plans cover less than 10% of the U.S. population, so we should not pretend that marketplace premiums represent the entire healthcare system.
They do, however, give us a window into the cost pressures affecting that system.
The Centers for Medicare and Medicaid Services reports that U.S. healthcare spending reached $5.3 trillion in 2024 – about $15,474 for every person in the country.
Healthcare accounted for 18% of the entire U.S. economy in 2024. That’s nearly one dollar out of every five.
CMS projects that healthcare spending will continue growing faster than the overall economy through 2034. By then, healthcare could consume 20.6% of the national GDP.
And it’s worth remembering that older Americans face the greatest exposure to these costs.
Personal healthcare spending for Americans 65 and older is almost two-and-a-half times the average for a working-age adult, according to CMS.
Those figures do not tell us what any individual will spend. Medicare, supplemental insurance, personal health and location all make a tremendous difference.
They do tell us something important: Healthcare costs rise precisely when most of us have fewer opportunities to earn additional income.
That makes healthcare more than another line in a budget. It’s one of the largest uncertainties in anyone’s financial plans (whether the planners realize it or not).
What potato chips tell us about household budgets
Strangely enough, we can see the same cost pressure in the snack-food aisle, of all places.
Earlier this year, PepsiCo cut prices on brands including Lay’s, Doritos, Cheetos and Tostitos here in the U.S. by as much as 15%.
The cuts initially helped increase demand. (Especially in the Reagan household!)
But it didn’t last.
In the second quarter, PepsiCo’s North American snack sales were flat. Its beverage sales were worse than flat, falling 4%.
Now, here’s the interesting part: PepsiCo CEO Ramon Laguarta said the company was working on additional cost-cutting measures. Impulse purchases at convenience stores and gas stations were hit especially hard. And Laguarta had a ready explanation:
“Will it change in the coming months? It all depends on the price of gas. So clearly that’s something that is beyond our control.”
Laguarta is just one more in a long line of CEOs warning of the next inflation wave.
Granted, one company’s quarterly results don’t prove that every American family is struggling to pay the bills. But snack foods and sodas occupy an interesting place in the household budget. They are not necessities. They are also not extravagant luxuries.
They’re the little treats we tend to buy without thinking too hard about it. A little reward at lunchtime, or something you buy to break up the monotony on a long drive. They’re about the most affordable way we can indulge ourselves… Until money becomes tight enough that even a few dollars matter.
When folks begin reconsidering a $2.50 bag of chips at the gas station, that’s a warning. It tells us something concerning about the cumulative financial pressure of necessities.
See, a higher insurance premium doesn’t remain neatly confined to the “healthcare” category of the household budget. A more expensive tank of gas doesn’t just affect how much we drive.
The extra dollars we pay have to come from somewhere.
Often, they come out of everything else… To the point that a tiny bag of delicious Doritos seems frivolous.
Inflation does not have to be spectacular to be painful
The Federal Reserve’s preferred inflation measure rose 4.1% in May compared with a year earlier, hitting a three-year high. Even after excluding food and energy costs, prices were still up 3.4% year-over-year.
Now, there is some encouraging context. Inflation-adjusted spending and income both rose during the month. Gas prices also declined from their May peak, which may reduce the financial pressure on families somewhat. At the moment, though, the average nationwide price of gas is $3.88, well above the President’s target:
Overall, these figures do not mean the economy is collapsing. They reveal a subtler problem.
Families can continue earning and spending while becoming steadily more financially stressed. The economy can grow while families cut back on small pleasures. Inflation can slow while prices remain far above where they were several years ago.
An average inflation figure can conceal individual components that rise much faster.
That is the retirement-planning lesson in these numbers. It is not enough to assume that every expense will rise at the same modest rate. Some costs may barely change. Some costs may actually decline. Others may jump 10%, 14% or 20% in a single year.
To get an idea of just how disparate these changes can be, check out this inflation chart measuring price changes over the last 25 years. TVs cost 98% less? That’s great! But it doesn’t make up for hospital bills rising 275%, or food prices doubling…
No one knows exactly what healthcare will cost five or ten years from now. Based on recent history, those costs will keep rising steadily.
We can always hope they’ll plateau, or even decline… But hoping isn’t much of a retirement strategy.
A measure of financial independence
Financial independence does not mean making yourself immune to healthcare costs, inflation or economic uncertainty.
(None of us has that power.)
It means reducing the damage of one unexpected expense or one economic crisis on our financial future.
Diversifying your savings with physical precious metals won’t make medical bills disappear. Owning gold and silver doesn’t ensure your savings will grow at the same rate as healthcare expenses.
But diversification is not about guarantees.
It is about refusing to make your financial future depend entirely on one kind of asset, one economic outcome or even one currency.
That is why many Americans choose to buy physical gold and silver – tangible financial assets that exist outside the conventional debt-based financial system.
The goal is not to predict every future expense correctly. It is to build savings that are independent of economic outcomes. If you get your diversification correct, then (hopefully) your predictions about the future don’t need to be correct.
If you are just beginning to research physical precious metals, you can continue your due diligence by requesting our free 2026 Precious Metals Information Kit.
And when you are ready to speak with a Precious Metals Specialist, call Birch Gold Group at (877) 749-7738.
