State and local governments can expect to spend 7.6 percent more of their budget on healthcare by 2025 as healthcare inflation continues to rise, according to a Fitch Ratings report.
The share of state and local budgets allocated to healthcare is expected to increase to 38.3 percent by 2025, up from 30.7 percent in 2015. Other priorities, including education, transportation and public safety, are expected to take a hit.
Assuming no significant policy action is taken over next several years to combat the rising prices, healthcare spending is expected to reach $1.6 trillion by 2025. In 2015, healthcare spending was $929 billion.
Fitch says these rising healthcare costs will pressure the credit ratings of lower-rated states.
Read the full report here.