Recent analysis from the Bank of America Institute reveals that approximately 29% of lower-income households in the United States are living paycheck to paycheck, a slight increase from previous years. This situation is characterized by spending over 95% of household income on essential expenses such as housing, groceries, and utilities. The analysis suggests that nearly a quarter of all U.S. households may find themselves in this position by 2025.

The inflation rate has risen to an annual rate of 3% this year, following a decrease to 2.3% in April. Although this rate is significantly lower than the pandemic peak of 9.1% in 2022, it remains above the Federal Reserve's target of 2%. Joe Wadford, an economist at the Bank of America Institute, noted that the resurgence of inflation is likely to exert additional financial pressure on lower-income households. Meanwhile, the cost of essential goods continues to rise, while wages for lower-income workers have only increased by 1% over the past year, exacerbating financial strain. Elise Gould, a senior economist at the Economic Policy Institute, highlighted that wage growth for lower-wage workers has significantly slowed since late 2022, partly due to a decrease in job openings and reduced worker mobility.

In contrast, higher-income households have experienced stronger wage growth, resulting in little to no increase in the percentage of these households living paycheck to paycheck. This divergence contributes to what economists describe as a "K-shaped economy," where wealthier individuals are better positioned to absorb inflationary pressures compared to those with lower incomes. Many low-income Americans remain unbanked, suggesting that the Bank of America's findings may not fully reflect the economic distress faced by the most vulnerable populations.

On the healthcare front, a proposed shift in funding by President Donald Trump aims to redirect resources to individuals for purchasing their own health insurance, rather than continuing government subsidies for Affordable Care Act (ACA) premiums. This change raises concerns about potential increases in healthcare costs and the risk of undermining the existing ACA framework, which currently provides coverage for millions of Americans. The ACA allows individuals to receive discount codes that reduce their health insurance premiums, making coverage more affordable. The proposed change would replace this system with health savings accounts, which can only be utilized with high-deductible health plans, typically requiring significant out-of-pocket expenses before coverage begins.

The urgency of addressing healthcare funding was highlighted during a closed-door meeting of House Republicans on November 18, 2025. Representative Jen Kiggans from Virginia emphasized the need to prevent rising premiums and loss of health insurance for many Americans, as an estimated 22 million individuals face substantial increases in their health insurance premiums due to the impending expiration of ACA funding on December 31. Kiggans has proposed a bill to extend this funding for one year, but only 14 Republicans have supported her initiative. The party leadership has indicated a preference for alternative solutions that would provide funds directly to individuals, potentially through health savings accounts or direct cash payments, rather than continuing the existing ACA structure.

As the deadline approaches, uncertainty remains about whether Republicans will reach a consensus on a plan that adequately addresses the needs of millions of Americans facing increased healthcare costs. This political impasse occurs against a backdrop of declining approval ratings for Trump, attributed to public dissatisfaction regarding his management of the high cost of living and ongoing investigations into various issues. As economic pressures continue to mount, the implications for healthcare access and affordability remain a pressing concern for many Americans.