Your wallet is already feeling it — and according to new research, it’s only going to get worse. After President Trump’s State of the Union 2026 address touted a “roaring economy,” millions of Americans are asking a different question: why does everything still cost so much? From health insurance to groceries to electricity bills, tariffs and expiring federal subsidies are hitting U.S. households from every direction — and the biggest cost increases are still ahead.
Tariffs Are Hitting Households Like a Hidden Tax
The nonpartisan Tax Foundation estimates that Trump’s tariffs cost the average U.S. household roughly $1,000 in 2025 — and that number is on track to reach $1,300 per household in 2026 if current policies remain in place. The Tax Policy Center puts the figure even higher, at approximately $1,230 per household this year.
The mechanism is straightforward: businesses that import goods from China, Canada, Mexico, and the European Union pay higher duties and eventually pass those costs to consumers. For most of 2025, large companies absorbed the tariff burden rather than raise prices. That strategy is ending. According to JPMorgan, businesses footed roughly 80% of the tariff bill last year — but that share could flip to just 20% in 2026, as firms across industries begin rolling out new price increases.
“A lot of our clients really didn’t want to pass the costs on, but now they’re really having to,” Kyle Peacock, principal at Peacock Tariff Consulting, told CNN.
Since December 2024, specific grocery items have surged sharply:
- Coffee: +33.6%
- Ground beef: +19.3%
- Romaine lettuce: +16.8%
- Orange juice concentrate: +12.4%
- Potato chips: +7.3%
(Source: U.S. Bureau of Labor Statistics, via Inc.)
Health Insurance: The Steepest Hike in Years
Perhaps no cost increase has hit American families harder in 2026 than health insurance. The expiration of enhanced premium tax credits — pandemic-era subsidies that lowered ACA Marketplace costs for over 20 million people — took effect on January 1, 2026, triggering a wave of premium increases unlike anything seen since 2018.
According to KFF (Kaiser Family Foundation), ACA Marketplace enrollees are seeing their premium payments rise by an average of 114% in 2026. A person earning $28,000 annually who previously paid around $325 per year for a benchmark plan is now paying $1,562 — nearly a five-fold increase.
Workers with employer-sponsored coverage aren’t spared either. Consulting firm Mercer projects that companies will spend over $18,000 per employee on health insurance in 2026. Workers themselves are likely to pay 6% to 7% more for their employer plan — more than double the current inflation rate. For small group plans, the median premium increase is 11%, while ACA Marketplace premiums are up an average of 26% nationally, per KFF data.
The Commonwealth Fund reviewed filings from 312 insurers across all 50 states and found a median proposed premium increase of 18% — about 11 percentage points higher than 2025.
“You’re going to have millions of people who say, ‘I can’t afford that.'” — Virgil Bretz, CEO of MacroHealth, via AARP
Utility Bills Are Climbing Fast
Electricity costs are another major pressure point for households in 2026. The U.S. Energy Information Administration projected wholesale electricity prices will reach $51 per megawatt-hour this year — an 8.5% increase compared to 2025. Higher natural gas prices and surging demand from AI data centers are straining an already aging power grid.
According to the Center for American Progress, electricity prices increased at 2.5 times the annual inflation rate in 2025, the highest annual increase since December 2014. Natural gas wholesale spot prices also jumped 56% in 2025 from the 2024 average. Millions of residents across 49 states are now facing higher utility bills or proposed rate increases that could collectively cost consumers more than $92 billion by 2028.
Groceries and Everyday Products: No Relief in Sight
Grocery inflation isn’t limited to coffee and beef. Canned fruits and vegetables have risen in price due to tariffs on steel and aluminum, which raised the cost of the cans themselves. Electronics and smartphones are also getting pricier, with major manufacturers announcing price adjustments tied to import costs.
According to a U.S. News analysis from February 2026, many companies held off on tariff-driven price hikes during the 2025 holiday season to protect sales — but that window has closed. Companies “big and small have begun a new round of increases, in some cases by high-single-digit percentage points,” the Wall Street Journal reported, as cited by U.S. News.
At the same time, wage growth slowed in 2025, meaning paychecks are not keeping pace with rising prices across most categories.
Car and Home Insurance: Increases Continue
Auto and homeowners insurance premiums have faced aggressive rate hikes in recent years, driven by rising repair costs, climate-related claims, and higher vehicle prices. While insurance price increases are expected to slow modestly in 2026, premiums are still rising in most parts of the country — adding yet another line item to already strained household budgets.
What You Can Do Right Now
The cost-of-living pressure in 2026 is real — but there are steps consumers can take to reduce the impact:
- Health insurance: Use your insurer’s price transparency tools to compare costs before procedures. Shopping for care at a freestanding imaging center, for example, can save thousands compared to hospital rates.
- Groceries: Plan meals around weekly sales, use store-brand products, and take advantage of grocery app coupons. Food pantries remain available for households that need assistance.
- Utilities: Audit your energy use, switch to LED lighting, and check whether your utility offers budget billing or assistance programs.
- Insurance: Shop competing providers annually. Bundling home and auto policies with one insurer can lower premiums.
Sources: Tax Foundation, KFF, CBS News, AARP, U.S. Bureau of Labor Statistics, Energy Information Administration.
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