What the election results could mean for gas prices, groceries, and health insurance

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The midterm election put Democrats in charge of both the House and Senate, reshaping Washington against a backdrop of rising inflation, tariffs, and conflict in the Middle East.

Democrats will take over as the majority when the new Congress is sworn in in January. The party's leaders have been critical of Trump policies as the cost of living rises in the U.S. Here's a look at the issues they will try to solve, and how their efforts could affect Americans' finances.

In January of 2026, the national average retail gas price was $2.81 per gallon. The U.S. and Israel initiated the conflict with Iran at the end of February. By April, gas prices had increased to $4.10. The average has remained above $4 per gallon since then, except in July. October's average was $4.31, down from $4.36 in September.

The elevated prices at the pump are largely driven by the war in Iran. The conflict has disrupted the Strait of Hormuz, a primary oil shipping route, creating a supply shock that has reverberated around the world.

House Democratic Leader Hakeem Jeffries has said his party will fight to end the Iran war. An end to the conflict may eventually reduce gas prices, but it depends on what happens in the Strait of Hormuz. Jeffries has also called on the Trump administration to wind down the war effort this year.

These are the steps Congress can take on the war itself and gas prices:

End funding for the Iran war. The Senate and the House approve new funding requests for the war. Once the new Congress is sworn in, the Democrats can deny those requests.

Pass a resolution to end the war. Congress can pass a resolution with a Democratic majority, but the president can veto it. The Democrats will not have the two-thirds majority required to override a presidential veto.

Suspend the federal gas tax and the federal diesel tax. The federal government taxes gas at $0.184 per gallon and diesel at $0.244 per gallon. Several federal lawmakers and President Trump have expressed support for pausing both taxes, so this could be a bipartisan effort.

A suspension of the federal gas and diesel taxes is the quickest lever, but the potential benefit would offset only a fraction of the increases drivers have absorbed this year.

Grocery and everyday prices: Tariffs and diesel cost effects remain

General inflation, according to the Consumer Price Index , has remained above 3% since March. The September inflation reading was 3.7%, an increase from the prior month's rate of 3.4%. Prior to this year, inflation had not ticked above 3% since May of 2024.

Food prices have not risen as quickly. The inflation rate on groceries was 1.8% in September, but has been as high as 2.9% this year.

Economists cite the war in Iran as a primary driver. Elevated diesel costs can put upward pressure on food and everyday prices by increasing manufacturing and transportation costs.

Tariffs are also a factor. While importers pay tariffs directly, they often pass these costs along to consumers in the form of higher prices.

What Democrats can do about grocery prices

Realistically, Democrats aren't likely to lower food prices, but they can work to slow the pace of inflation, which means prices won't rise as quickly. But most of the factors affecting food prices are outside of Congress' control, including climate, crop performance, labor, and other costs.

Tariffs are the exception. Repealing tariffs on imported foods or packaging materials could lead to price reductions for certain products. However, the path to a full tariff repeal is complicated. A Democratic Congress can pass bills to roll back the levies still in force, but President Trump can veto them.

Other efforts to pause the diesel tax or end the war in Iran won't immediately lower grocery prices.

Health insurance: Open enrollment is here

Enhanced Affordable Care Act income-based tax credits, called PTCs, that made healthcare more affordable for qualifying Americans expired at the end of 2025. Democrats and Republicans couldn't agree on the future of the tax credits, and the disagreement led to an extended government shutdown last year.

Democrats have vowed to restore PTCs and Medicaid funding that Republicans cut. Jeffries has defined both moves as high-priority items, alongside the repeal of Trump's tariffs.

What Democrats can do about healthcare costs

Democrats have two avenues for achieving their healthcare goals, and neither is certain or immediate:

As the minority party, they can demand healthcare changes in the next government funding bill — which will replace the current funding bill that runs out on December 11, 2026. This tactic didn't work last year and could result in a government shutdown.

Alternatively, they can wait until January, when they're sworn in as the majority, to pass new bills. President Trump will still have veto power, however.

In most states, open enrollment for individual and family ACA marketplace plans runs from Nov. 1 to Jan. 15, but Dec. 15 is the last date to enroll for coverage starting Jan. 1. Medicare open enrollment runs from Oct. 15 through Dec. 7.

Relief on healthcare costs isn't likely in the short term.

The national average fixed rate on a 30-year mortgage has been rising since July, peaking in October at 7.4%. Like gas prices, mortgage rates began declining in the weeks leading up to the midterm elections. The last calculated average is 7.18% as of Nov. 5.

The CPI shelter measure, which lags market rents by six to 12 months, has been rising at an annual rate of 3% or more throughout 2026. For context, this measure of housing inflation was 8.2% in March of 2023 and has been slowly declining since.

What Democrats can do about mortgage rates and rents

Mortgage rates are driven by Treasury yields , inflation expectations, and macroeconomic factors. Rents move primarily with supply and demand.

Congress doesn't have direct influence in any of these areas. Their likely playbook would involve legislation to promote housing supply, assist with rents or home down payments, or reduce the cost of mortgage insurance. Any new programs would be subject to presidential veto and, if enacted, would deliver gradual results at best.

The midterm election results may feel like a big win for those who voted for Democrats, but cost-of-living trends don't change overnight. Bills take time to pass, and their economic effects are usually gradual. With that in mind, it's wise to stay conservative financially. Here are some moves to consider.

Keep budgeting. Plan for gas and food prices to remain elevated. A wind-down of the conflict in the Middle East should lead to lower gas prices, but the timing is uncertain. Be prepared for high gas prices as the new normal. That way, it'll feel like a bonus when prices at the pump start to moderate.

Secure healthcare coverage. Don't miss open enrollment waiting for cheaper options. There aren't likely to be any big changes in healthcare until next year.

Evaluate refinancing and new mortgage options carefully. Mortgage rates often follow 10-year Treasury yields. And Treasury yields tend to decline after midterm elections, according to Swiss bank and asset manager Lombard Odier. While mortgage rates may decline over the next few months, economic conditions remain unpredictable. So, exercise caution on refinancing or homebuying decisions. Weigh refinancing opportunities on the break-even timeline and evaluate new mortgages on affordability.

Add to an emergency fund. Beefing up emergency savings provides financial flexibility and helps keep credit card debt in check. Start the habit now and increase your savings deposits if lower gas prices create more breathing room in the budget.

Don't change an investing approach. According to JPMorgan, the S&P 500 has gained in the year following every midterm election since 1950. The average gain has been about 15%. The lesson? Don't change an investing approach in response to the midterm election results. If the state of a retirement account still raises concern, revisit the asset mix and ensure it aligns with the set investment timeline and risk tolerance.

In January, the balance of power in Washington will change. Democrats will control Congress, alongside a president who can veto their legislative efforts. The cost-of-living pressures aren't likely to ease quickly — so budget as if they're here to stay.