Where Inflation Hit the Middle Class Hardest in 2025

Core Insights - Inflation in the U.S. reached a 40-year high of 9.1% in June 2022, with ongoing cost of living challenges, particularly affecting middle-class households [1] - Healthcare costs are rising faster than overall inflation, with out-of-pocket expenses averaging $1,514 per person in 2023, and expected to increase further [2] - The expiration of enhanced tax credits for health insurance under the Affordable Care Act (ACA) by the end of 2025 will lead to increased premium payments for many lower- and middle-class households [3][4] Healthcare Sector - Healthcare costs have consistently risen by 2% to 3% annually, with projections indicating further increases in the coming years [2] - The average enhanced tax credit for ACA marketplace participants is $5,525 for those earning $65,000, which will not be available post-2025, resulting in higher out-of-pocket expenses [4][5] - Anticipated increases in out-of-pocket costs include hospital visits and prescription medications, with hospital services increasing by an average of 3.2% per year, physician services by 2.6%, and prescription medications by 3.4% [5][7] Food Sector - Food prices rose by 3.1% in the 12 months ending in September 2025, with grocery prices increasing by 2.7% and food away from home by 3.7% [5] - A survey indicated that nearly half of Americans find groceries harder to afford compared to the previous year, highlighting the financial strain on middle-class households [6]