The most recent government shutdown failed to resolve its main cause: the expiration of federal subsidies for healthcare delivered under the Affordable Care Act (ACA). And now, many homeowners, already feeling the effects of strained affordability, are finding their monthly health insurance premiums exceeding their mortgage payments.
"Lenny and Mandee Wilson, who are 47 years old and live in Charleston, WV, paid $255 a month last year for a low-end ACA plan," reported The Wall Street Journal on Jan. 26. "Late last year, they learned their bill would be going up to $2,155 a month, a sum nearly triple their monthly mortgage payment of about $760."
The Wilsons are self-employed. He's a partner in an IT company, and she's a potter. They don't have the option of workplace coverage.
Together, they earn $110,000 annually, which is below the $128,700 median income for married couples reported in the most recent Census data. With the expiration of federal subsidies, their health insurance premiums now represent nearly a quarter of their total earnings.
A Modest Income Can Be Too High
"Middle-income earners without good options for workplace health insurance — like early retirees, independent contractors and small-business owners — were quick to sign up [to subsidized ACA coverage]," says The Journal. "Nonprofit KFF estimates that about 10% of ACA enrollees in 2025, or roughly 2.5 million people, have annual incomes above 400% [of the federal poverty level]."
KFF has an interactive map showing the impact of the subsidy removal on a single 60-year-old person making more than $62,757 a year, which is 400% of the FPL. In 15 states, the hike in monthly healthcare premiums is more than 200%, including in Texas, Florida and Illinois. In West Virginia and Wyoming, the rise is greater than 400%.
For many homeowners, this additional cost is beyond their means. Some must choose between their home and their health coverage.
The Wilsons reluctantly opted to forgo their healthcare insurance. But they acknowledge that a single trip to the ER or a night in a hospital could virtually wipe them out financially.
K-Shaped Recovery
Some might recognize this as part of the K-shaped economic recovery that we've seen since the pandemic.
"A K-shaped recovery describes an uneven economic rebound where some groups or sectors thrive (the upward stroke of the 'K') while others decline or stagnate (the downward stroke), widening inequality, as seen after the COVID-19 pandemic, with tech/wealthy sectors growing and hospitality/lower-income individuals struggling," says Google's AI.
This is different from a mutually beneficial V-shaped recovery where everyone bounces back together. Instead, the K-shaped recovery represents divergence between the rich and the poor, which creates an unstable economic scenario.
Bloomberg has a video on YouTube that describes a K-shaped recovery and its implications.
"A big reason the term is popping up so often is that it helps explain an unusually muddy and convoluted period for the U.S. economy," explained AP last month. "Growth appears solid, yet hiring is sluggish and the unemployment rate has ticked up. Overall consumer spending is still rising, but Americans are less confident."
Of course, a section of Americans are increasingly prospering as they ride the upstroke of the K. But many others find themselves struggling to gain a grip as they slide ever lower on the K's downstroke.
Some homeowners may be unable to halt their financial decline. But others may be able to relocate to less costly housing and healthcare markets. And some, especially younger folk, may be able to retrain in industries that still offer good salaries.
