How are government budgets affected by rising health care costs?

What will be an ideal response?

The budgets of government at all levels—Federal, state, and local—are also worsened by spiraling health care expenditures. Medicare and Medicaid has been the fastest growing segment of the Federal budget. Higher taxes or reductions in other budget components (national defense, education, environmental programs) must cover the increases in health care costs. States are finding it difficult to cover their share of Medicaid costs. This situation requires them to reduce other expenditures on infrastructure, education, and welfare. Local governments face similar strains, especially to finance hospitals and public health services.