Inflation alarms are starting to sound again.
The Trump administration’s tariffs are beginning to bite as more companies say they’re hiking prices, reducing discounts or contemplating price increases. Odds are your money will purchase less at the grocery store and in the car lot through the next year, at least.
Adding to the emerging financial stress on household budgets is the prospect of steeper health care bills. (Even here, tariffs wield a negative impact, since many medical goods come from international sources.) Health care has already become more expensive through the decades. Annual per person health spending rose in the past five decades from $2,151 in 1970 to $14,570 in 2023 (adjusted for inflation), according to KFF, the health research nonprofit.
The health care inflation numbers are daunting. Take the headline from a recent report from global consulting firm Mercer: “Employers prepare for the highest health benefit cost increase in 15 years.” The total health benefit cost per employee should rise 6.5% on average in 2026. That’s the highest increase since 2010, “even after accounting for planned cost-reduction measures.”
Insurers in the Affordable Care Act Marketplace are proposing a median premium increase of 18%, according to KFF. That’s more than double last year’s increase. Experts project Medicare costs to rise in 2026, too.
The Part B premium will likely increase by 11.6% and Part B deductible by 11.2%. Medicare Advantage and Part D drug benefit premiums seem likely to head higher. The federal government’s 15% cut to Medicaid spending that will unfold through several years will negatively impact the program’s participants.
Fidelity’s latest survey of estimated health care costs in retirement predicts a 65-year-old retiring this year can expect to spend an average of $172,500 in health care and medical expenses out-of-pocket throughout retirement. That’s up 4% from last year.
Expensive health care bills are already cutting into personal finances. A 2025 Pew Research Center survey revealed 27% of respondents said they had trouble paying for medical care for themselves or their family in the past year. The survey also showed more Americans reporting they expect their financial situation to deteriorate. About 3 in 10 adults (28%) expect household finances to be worse a year from now, up significantly from 16% a year ago.
Source link