Terry Savage: The health insurance sinkhole

Financial columnist Terry Savage is sounding the alarm on what she describes as a health insurance sinkhole—a crisis in the making that threatens to swallow not just the uninsured but also those who believe their coverage protects them.

Savage warns that doomsday predictions about the health insurance system are no longer theoretical. The structural problems—rising premiums, shrinking networks, escalating deductibles, and insurers pulling out of markets—are converging in ways that will be felt across the entire healthcare system, not just by the most vulnerable.

Even Americans who pay their own premiums or receive coverage through their employers are not insulated. Employer-sponsored plans have been shifting more costs onto workers for years, through higher deductibles, copays, and coinsurance. The result is that having insurance no longer guarantees financial protection when serious illness strikes.

The crisis is compounded by demographic and economic pressures. An aging population requires more care, medical technology advances are expensive, and pharmaceutical costs continue to climb. Insurance companies, caught between rising claims and the need to maintain profitability, respond by tightening coverage and increasing out-of-pocket requirements.

Savage's analysis points to a system where the gap between what insurance promises and what it actually delivers is growing wider. For many families, a serious diagnosis still means financial devastation, even with coverage. The term "underinsured" has become as important as "uninsured" in understanding the scope of the problem.

What This Means For You: Don't assume your health insurance has you covered. Review your policy's deductible, out-of-pocket maximum, and network restrictions now—not when you need care. Consider whether an HSA or supplemental policy makes sense for your situation. The sinkhole is real, and the people falling in are often the ones who thought they were standing on solid ground.