Millions Face Financial Ruin as Insurance Coverage Lags Rising Costs
LOS ANGELES,Oct. 15, 2025 - Millions of Americans are increasingly vulnerable to catastrophic financial loss as they forgo insurance coverage for both health and property, citing affordability and a belief that major disasters are unlikely to impact them personally. The trend leaves families exposed to potentially devastating expenses, as evidenced by the recent experience of a Los Angeles family who lost their home in a January fire.
The cost of healthcare has more than tripled as 2000, rising from $1.4 trillion to $4.9 trillion in 2023,according to the Peterson-KFF Health Spending Tracker. This escalating cost is a primary driver for many choosing to go without health insurance.
“The insurance is just catastrophic coverage in the worst-case scenario,” explained Chancey, whose last name was not provided. “Clients pay out of pocket for many reasons – so premiums don’t go up, and [because] you can get things fixed faster with cash many times instead of waiting on insurance claims.”
This pattern is particularly prevalent among young adults, often referred to as “young invincibles,” according to Rishi Sood, executive director of New York City’s Office of Health Care Access and Policy in the Bureau of Equitable Health Systems. “People who are over 65 are more likely to be insured as of Medicare, and there is definitely a phenomenon where people who are quite young, in their 20s, feel invincible,” Sood said. “More of those people go without insurance…as they have fewer health issues and perceive themselves to be invincible.”
The risks of forgoing insurance extend beyond healthcare. Chad Comey and his parents were uninsured on their Pacific Palisades condo, believing its location and construction - a building with a fire-resistant metal roof surrounded by concrete structures – offered sufficient protection. Comey reasoned that a widespread disaster would necessitate federal intervention.
“We rationalized that if this area were to burn, the whole town would burn,” he said. “It would be such a disaster of epic proportions that [the Federal emergency Management Agency] would have to come in, Congress would have to pass a stimulus bill to recover from it, because the real estate is so darn expensive.”
However, a fire in January destroyed the family’s home of 51 years and all its contents, including irreplaceable family photos. While the homeowners association’s California FAIR Plan policy will cover rebuilding the structure’s walls, the Comey family is responsible for all other expenses.
Nine months after the fire, Comey is couch surfing, and his parents are living with relatives, relying on funds raised through a gofundme campaign to survive.The case underscores the potentially devastating consequences of underinsurance and the limitations of relying on disaster relief.
