Jay Rugani, partner at A16Z Health and Bio, sits down with Nikhil Krishnan, founder of Out of Pocket, to examine how consumer behavior, technology, and economics are converging to reconfigure U.S. healthcare in 2026.

The conversation explores Krishnan's predictions for healthcare transformation, including why insurance defection is accelerating, how cash pay and proactive care are expanding, and what this transition means for the long-term structure of American healthcare delivery.

The Great Health Insurance Defection of 2026

Uninsured rates could explode from today's 9.5% to 15-16%, unwinding 15 years of Affordable Care Act progress as people refuse to play the healthcare insurance game

Premium math drives defection: "If I'm a relatively healthy person with no expected procedures, my premiums are $550 a month plus a $5K deductible - that's $10-15K before anything is covered" - Nikhil

Small group insurance faces adverse selection as healthier employers exit through level funding, leaving sicker pools with skyrocketing premiums

Health sharing ministries emerge as middle-ground alternative, offering crowdfunded healthcare at lower costs but with coverage uncertainty

Cash Pay Healthcare Creates New Market Dynamics

Care navigation becomes critical as uninsured patients must decide "is this serious enough that I need to see a higher cost medical practitioner if I'm paying out of pocket"

Hyper-low-cost delivery emerges with examples like Utah's doctronic pilot offering prescription refills at $4 versus $150 traditional visits

Bundled cash payments could replace current haggling system where "I feel like I'm in an Indian market" negotiating self-pay rates - Nikhil

Two distinct cash-pay populations: proactive health crowd buying supplements and memberships, versus newly uninsured seeking basic affordable care

Screening and Diagnostics Boom in Consumer Health

Diagnostics becomes underinvested hot area as "people want to be monitored in some capacity" even when doctors say monitoring won't change care pathways

10+ year lag between research evidence and care guidelines drives cash-pay demand for tests like coronary calcium CT scans

Healthcare system creates standardized care "good at the median level for everybody, but people want more agency - no one wants to be told 'just wait and see'" - Nikhil

Wearables need regulatory middle path as "digital health screeners" - not medical devices but more than wellness products, showing irregularities patients should discuss with doctors

AI Revolution Meets Populist Resistance

State-federal AI regulation clash intensifies as Utah pilots AI prescribing while Illinois and Nevada restrict AI therapy chatbots

Anti-AI populism emerges from job loss fears in healthcare's 23 million workforce, implementation problems, and inevitable "big AI mistake that happens publicly"

AI creates audit trails and standardization advantages: "You understand the rules of the game and get answers faster, even if not the answer you want"

Healthcare AI intellectual property battles intensify with "lucrative copyright and licensing deals" as disease scales and protocols become valuable IP

GLP-1s Transform Into Consumer Products

GLP-1 usage rates will more than double to 30% of population driven by pill formulations, price competition, and direct-to-consumer marketing

"Near infinite demand" meets competitive drug class as "everyone wants to not be obese" and pharma companies treat drugs like consumer products for first time

Mental and behavioral health applications likely to disappoint despite self-experimentation, as similar mechanisms showed "not fantastic results" in smoking and alcohol trials

Unexpected inflammation benefits emerge as users report microdosing helps Crohn's, ulcerative colitis, and psoriasis, with some stopping biologics

Peptide Gray Market Faces Regulatory Reckoning

FDA crackdown on gray market peptides predicted despite RFK Jr.'s promise to end "aggressive suppression," creating regulatory uncertainty

Peptide parties and underground experimentation show "unmet need" as people with chronic pain "are willing to try a lot of things" including experimental drugs

Compounding pharmacy accreditation could emerge after "big news story of a bad batch that really harmed a lot of people" forces regulatory response

Broader question emerges: "Should we actually be capturing structured data from these people if they're doing it anyway?" rather than losing learning opportunities

Resources Mentioned

evidence and care guidelines drives cash-pay demand for tests like coronary calcium CT scans Healthcare system creates standardized care

in some capacity" even when doctors say monitoring won't change care pathways 10+ year lag between research evidence and care guidelines drives cash-pay demand for tests like coronary calcium CT scan

and then care guidelines

, it's really hard to get that. And also, there's still a huge lag between like evidence and sorry, research and then care guidelines, right? So the lag is like 10 plus years in a lot of cases betwee

Still Here

Humans make mistakes too. Like, again, the doctronic one, I think, is just like an interesting case study here, where it's like, you actually, what you would want to do is compare maybe like the doctr

The Three-Body Problem (The Three-Body Problem Series Book 1)

the docs that are the influencers, the KOLs. You're going to go talk to the docs where you ran the study and that's the problem. We're talking the TikTok influencers. Now they're the KOLs. Now you're