Insights Inflation Checkpoint: A Deep Dive Into Healthcare Services Inflation

Highlights

• Healthcare spending is a sizable portion of household budgets, and costs — including insurance premiums, deductibles, and copayments — have been steadily rising.
• Medical services costs are a key component of the Fed’s preferred inflation measure, but because they are acyclical, they matter less from a monetary policy standpoint.
• In Bessemer’s price index, healthcare represents a higher weighting than the base index, and this has been an upward driver of our measure in recent years.