Change in medical costs
- Health care, including employee health insurance and medical assistance, is over 20 percent of the general fund budget.
- The size of the health care budget, combined with rapid growth in per capital 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, 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).
Last modified: January 8, 2019