1995-2024

• Health care, including employee health insurance and medical assistance, is over 20% of the general fund budget.
• The size of the health care budget, combined with the rapid growth in per capita health care costs, make this a prime source of pressure on spending.
• Except for a brief period in the mid-1990s and during the recession in 2008 and during this recent COVID-19 pandemic period, health care costs have grown much faster than general inflation as measured by the Implicit Price Deflator (IPD) for personal consumption.
• Beginning in 2002, cost shifts from employers to employees resulted in much of the decrease in growth of employer medical costs.
• More recent employer cost control efforts have included generic drug preferences, care management incentives, high-deductible consumer-directed health plans, and health savings accounts (HSAs).
• In fiscal year 2024, health care costs for state and local employees grew more than twice as fast as the overall inflation reflected in the economy.This highlights that health care is a significant driver of rising expenses for state and local governments, outpacing the general price increases of goods and services.

Data Sources:

• Office of Financial Management
• U.S. Department of Labor, Bureau of Labor Statistics
• Bureau of Economic Analysis

E-mail: OFM.Forecasting@ofm.wa.gov