The Health Care Effect

Vadum, Mathhew
December 2004
Bond Buyer;12/14/2004, Vol. 350 Issue 32029, p1
Trade Publication
The article discusses the impact of extraordinary cost growth of health care and health insurance on local governments. This surcharge costs over the past five years will continue to take its toll on local governments in the future and is expected to become an increasingly important credit consideration. This report is based on Fitch Ratings. Health care costs have gone up an average of 14.2% annually over the past five years, compared to an overall inflation rate of only 2.4% in the same period. The rising costs are more pertinent for U.S. municipalities than for private employers because governments typically provide more generous health care packages far employees.


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