The Coverage Tax
Motor vehicle insurance inflation outpaces CPI — a gap that persisted through...
What is the current The Coverage Tax?
Health insurance costs are rising 3.22 percentage points faster than core CPI in the latest reading. The Coverage Tax measures this gap — how much faster insurance premiums are climbing compared to general prices. This sustained premium means insurance is steadily consuming more of household budgets, particularly for those on employer plans with rising deductibles and copays. Source: BLS.
Car insurance premiums still rising 2.7pp faster than overall inflation
Motor vehicle insurance inflation outpaces CPI — a gap that persisted through 2023–2025.
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Is this happening to you?
Has your auto insurance premium jumped even though your driving record hasn't changed?
How has The Coverage Tax changed over time?
| Period | Value | YoY Change |
|---|---|---|
| Feb 2026 | 3.22 pts | +0.3 pts |
| Jan 2026 | 2.65 pts | −0.3 pts |
| Dec 2025 | 2.6 pts | −0.7 pts |
| Nov 2025 | 4.16 pts | +1.2 pts |
| Sep 2025 | 4.65 pts | +2.2 pts |
| Aug 2025 | 5.56 pts | +4.1 pts |
| Jul 2025 | 3.8 pts | +2.1 pts |
| Jun 2025 | 2.47 pts | −0.6 pts |
| May 2025 | 2.75 pts | −1.2 pts |
| Apr 2025 | 3.23 pts | −1.0 pts |
| Mar 2025 | 2.45 pts | −2.3 pts |
| Feb 2025 | 2.97 pts | −0.6 pts |
Frequently Asked Questions
What is The Coverage Tax?
The Coverage Tax measures how much faster health insurance costs rise compared to core CPI. At 3.22 percentage points, insurance premiums are significantly outpacing general inflation.
Why does this matter?
Rising insurance costs reduce take-home pay and increase out-of-pocket medical expenses, contributing to the cost pressure the American Distress Index tracks.
Where does this data come from?
Derived from BLS health insurance CPI data compared to core CPI.
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