The latest headline on inflation this morning indicates a continued rise, as the Bureau of Labor Statistics released its data showing a 3.7% increase on an annual basis for items such as groceries, gas and airfare. At 3.7%, the consumer price index is well above the Federal Reserve’s target rate of 2%.

Affordability is a top concern among voters in the midterms. The official CPI rise of 3.7% is challenging enough. But escalating out-of-pocket healthcare costs well in excess of the CPI exacerbate the problem of affordability for the typical American whose wages haven’t grown commensurately. These include deductibles and premiums. According to KFF, healthcare costs are at the top of the list of people’s financial worries in 2026.

Open enrollment season is upon us. Premiums in the employer-sponsored market covering over 165 million Americans are projected to increase in 2027 by at least 8% on average in the small and large group insurance plans, with double-digit hikes being commonplace. The average level of an insured person’s deductible — the amount of money an enrollee must spend before insurance kicks in — will continue to go up, with well over a third of employees now facing deductibles of $2,000 or more.

In addition, median premium increases are expected to be 15% in the Affordable Care Act marketplace. The expiration of enhanced subsidies for the roughly 23 million people who buy their insurance on the ACA exchanges has translated into much higher premiums and deductibles . ACA enrollees are folks who don’t get their health insurance from an employer and don’t qualify for Medicaid or Medicare. Many are self-employed or small business owners.

Regular premium subsidies will offset, at least to some degree, the increase for the majority of ACA enrollees. But spikes of 15% or higher in premiums will be incurred by enrollees who aren’t eligible for an enhanced or regular subsidy, plus anyone who buys individual market coverage outside the marketplace, where subsidies aren’t available. Adding to the burden of ACA beneficiaries is the fact that an average deductible for a standard ACA silver plan in 2026 is close to $5,000, approximately twice what it was a decade ago.

Several factors appear to be driving the rise in healthcare spending and premiums , which include greater utilization of medical services and technologies and higher prices.

The CPI is published by the United States Bureau of Labor Statistics. It’s the primary barometer of inflation in the U.S. While it’s the best-known gauge of inflation, the CPI often doesn’t correspond well to how ordinary people experience price increases. Critics say the government’s numbers are largely missing certain expenses that affect many Americans, including home purchase prices and mortgage payments, property taxes, interest charges from credit cards, auto and student loans and other costs impacting the overall cost of living.

And then there are healthcare costs. The BLS uses an indirect method that tracks the insurer’s retained earnings or premiums minus benefits paid out. However, out-of-pocket costs for healthcare, including deductibles and premiums, are soaring in the commercial sector and these aren’t fully captured by the CPI. This implies that consumers already facing higher inflation for gas, groceries and the like, are also being impacted by the surge in certain healthcare costs.

The CPI includes direct out-of-pocket costs like co-payments for prescription drugs, physician visits and medical procedures, but it misses the growing financial burden of increasing deductibles and premiums.

The uptick in healthcare costs affects employees and employers alike. And because employers must allocate increasing amounts of money to insurers, this in turn crowds out their ability to increase wages. This helps to explain in part why wage growth isn’t keeping up with inflation. In turn, this causes employees’ real income to drop . The latest data shows that from September 2025 to September 2026, real average hourly earnings decreased by 0.6%. Given that the CPI was used to make this calculation, the decline would likely be worse if one were to account for rising deductibles and premiums in healthcare.

Nearly half of Americans in 2026 say it’s difficult to afford healthcare bills , even if they have insurance. Moreover, KFF reports that 36% of Americans say they skipped or postponed medical treatment in 2025 owing to cost. In addition, approximately 20% said they did not fill a medication they were prescribed because they couldn’t afford their deductible. And about 50% of Americans reported they cannot pay a $500 medical bill without going into debt .

With the spike in premiums and deductibles not included in the CPI, it’s evident that certain out-of-pocket healthcare costs are enhancing an already growing affordability crisis.