{"id":267305,"date":"2026-04-14T13:12:10","date_gmt":"2026-04-14T13:12:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/267305\/"},"modified":"2026-04-14T13:12:10","modified_gmt":"2026-04-14T13:12:10","slug":"how-expiring-subsidies-and-inflation-squeeze-households","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/267305\/","title":{"rendered":"How expiring subsidies and inflation squeeze households"},"content":{"rendered":"

A year ago, I would have told you a different story about the American consumer.<\/p>\n

Working-class and middle-income households \u2014 the people I spend my time reporting on \u2014 were strained, yes, but they were holding on. They were adapting. They were, in the language economists prefer, \u201cresilient.\u201d<\/p>\n

That word feels increasingly out of touch.<\/p>\n

Today, that resilience is fraying \u2014 not because of one catastrophic shock, but because of a steady erosion of support combined with rising costs that are hitting all at once: health care, energy, food, credit.<\/p>\n

If you want to understand what that looks like, listen to Terri Littleton.<\/p>\n

She\u2019s a 63-year-old Sacramento-area baker who runs a small business supplying desserts to coffee shops and hosting pop-ups. She is exactly the kind of self-employed, working-class American that policymakers often point to when they talk about entrepreneurship and grit.<\/p>\n

But here\u2019s what resilience looks like in her life right now: putting her health insurance premium on a credit card and hoping she can pay it down before the next bill hits.<\/p>\n

\"Terri Terri Littleton, 63, a self-employed owner of Terri Does Desserts, places ingredient labels on containers after adding slices of a cake she made earlier on Wednesday, April 1, 2026, in Sacramento. The baker struggles to pay for her health insurance, which has increased from $255 to $555, she said. \u201cWhen they ended the subsidy, they said it would go up $100,\u201d said Littleton, who now pays with her credit card but says it is very challenging. REN\u00c9E C. BYER rbyer@sacbee.com <\/p>\n

Her monthly premium more than doubled — from $255 to $555 — after enhanced Affordable Care Act subsidies expired.<\/p>\n

\u201cIt\u2019s killing me,\u201d Littleton said. \u201cYou think you\u2019re caught up and everything, and then, \u2018Oh, God, I\u2019ve got to pay my premium.\u2019\u201d<\/p>\n

She\u2019s cutting back on everything from entertainment to business supplies, pushing more expenses onto credit. She\u2019s considering taking on more work, not to get ahead but just to stay insured. And she\u2019s quietly worrying about what will happen if a health issue forces her to stop working altogether.<\/p>\n

This isn\u2019t an outlier story. It\u2019s increasingly the norm for many Americans who consider themselves to be part of the middle class.<\/p>\n

A new survey by KFF, a San Francisco-based health policy organization<\/a>, finds that after the U.S. Senate let those enhanced subsidies expire, 80% of marketplace enrollees reported higher health care costs<\/a>, and like Littleton, more than half say those costs are \u201ca lot higher.\u201d<\/p>\n

The consequences ripple outward as 55% say they are cutting back on food or basic household expenses to afford care, nearly 20% are not confident they can afford premiums all year and nearly one in 10 have already dropped coverage altogether.<\/p>\n

That is not resilience. That is triage.<\/p>\n

Data catching up to what households feel<\/p>\n

These feelings of insecurity are reverberating beyond the Terri Littleton\u2019s of the world. Even higher-income households, typically more insulated, are reporting significant drops in confidence.<\/p>\n

Economists at Bank of America threw out their predictions for economic expansion and instead warned that the nation could experience \u201cmild stagflation,\u201d a term that gained prominence in the 1970s when the U.S. saw rising consumer prices, economic stagnation<\/a> and high unemployment.<\/p>\n

A UCLA report released in March noted that the economy is functioning unevenly. They described it as bifurcated: High-productivity sectors are surging while employment growth is lagging. That divide shows up clearly in California, where output is growing, but payroll employment remains weak.<\/p>\n

And it shows up in kitchens, credit card balances and doctor\u2019s offices across the country.<\/p>\n

\"Terri Terri Littleton, 63, a self-employed owner of Terri Does Desserts, carries a red velvet cake she had just iced in an industrial kitchen in Sacramento on Wednesday, April 1, 2026. Although the baker struggles to pay for her healthcare as a single business owner, she said she tries to maintain a positive outlook on life. REN\u00c9E C. BYER rbyer@sacbee.com <\/p>\n

Health care is a particularly sharp lens into this fragility. A recent survey from the Public Policy Institute of California found that 56% of Californians expect health care costs to become less affordable<\/a> in the next year, and many are already delaying care or worrying about unexpected medical bills.<\/p>\n

These concerns are tied directly to policy decisions, including the expiration of ACA subsidies and looming Medicaid eligibility changes that are removing financial supports faster than households can adjust.<\/p>\n

This is the piece of the story that is consistently underestimated.<\/p>\n

Economists tend to model shocks as discrete events: a recession, a spike in unemployment, a financial crisis.<\/p>\n

But what we are seeing now is something more subtle and, in some ways, more dangerous: a cumulative squeeze.<\/p>\n

Insurance premiums double. Gas prices climb. Grocery costs inch higher. Interest on credit cards compounds.<\/p>\n

Individually, each might be manageable. Together, they destabilize.<\/p>\n

Economy strong on paper, fragile in real life<\/p>\n

Littleton understands this intuitively. She described how rising diesel prices increase the cost of the ingredients she buys in bulk — butter, eggs, sugar — which then feeds into her business costs and ultimately back onto consumers.<\/p>\n

\u201cIt\u2019s just this whole trickle down,\u201d she said, \u201cand who pays for it? The consumer pays for it.\u201d<\/p>\n

That\u2019s the fragility economists are missing: not a collapse but a slow accumulation of pressure points that leave households one disruption away from crisis.<\/p>\n

\"Terri Terri Littleton, 63, a self-employed owner of Terri Does Desserts, spreads cream cheese icing on a red velvet cake in an industrial kitchen in Sacramento on Wednesday, April 1, 2026. The baker supplies desserts to several restaurants and coffee shops. Escalating costs for ingredients, gas, rent, and healthcare have made life very challenging, she said. REN\u00c9E C. BYER rbyer@sacbee.com <\/p>\n

A year ago, many households had buffers: expanded premium tax credits, more federal food aid, stronger wage growth.<\/p>\n

Those buffers are gone, and in their place, there\u2019s rising debt. Americans now carry a record $1.277 trillion in credit card balances, up sharply from pandemic lows.<\/p>\n

That\u2019s not just a statistic. It\u2019s a signal.<\/p>\n

People aren\u2019t spending because they feel confident. They\u2019re spending because they have to, and increasingly, they\u2019re borrowing to do it.<\/p>\n

This is why the current moment is so easy to misread. From 30,000 feet, the economy looks stable, perhaps even strong. From the ground level, it looks brittle.<\/p>\n

When the next shock comes, whether it\u2019s a job loss, a health crisis or another spike in prices, there is far less cushion to absorb it.<\/p>\n

Littleton put it plainly: \u201cWe\u2019re not rich people who can just write a check and pay for health care. We need this to survive. We need low premiums.\u201d<\/p>\n

Policymakers and economists would do well to listen.<\/p>\n

The warning signs aren\u2019t hidden. They\u2019re just not showing up where we\u2019re used to looking.<\/p>\n

Related Stories from Sacramento Bee<\/p>\n


\n \"Profile
\n <\/a><\/p>\n

Cathie Anderson covers economic mobility for The Sacramento Bee. She joined The Bee in 2002, with roles including business columnist and features editor. She previously worked at papers including the Dallas Morning News, Detroit News and Austin American-Statesman.\n <\/p>\n","protected":false},"excerpt":{"rendered":"A year ago, I would have told you a different story about the American consumer. Working-class and middle-income…\n","protected":false},"author":2,"featured_media":267306,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[32],"tags":[121,123,122],"class_list":["post-267305","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sacramento","tag-sacramento","tag-sacramento-headlines","tag-sacramento-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/267305","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/comments?post=267305"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/posts\/267305\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media\/267306"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/media?parent=267305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/categories?post=267305"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-ca\/wp-json\/wp\/v2\/tags?post=267305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}