Medical Care Inflation

Chart of the Week for November 28-December 4, 2003

This week, Congress passed a Medicare bill that will provide prescription drug subsidies for many seniors. The chart above shows why this legislation has been eagerly awaited. Over the past ten years, the overall Consumer Price Index has risen about 26% in total. However, inflation for medical care and services has been higher than overall inflation in nine out of ten years. Over the past decade, the price of medical care has risen 46% in total, putting pressure on employees, employers, and retirees alike. The new prescription drug benefit, slated to take effect in 2006, will cover about 75% of drug costs up to $2,250 a year.

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