Minnesota State Auditor Pat Anderson says that the taxpayers are in for a surprise when they come to know that the state has not set aside anything in term of their medical benefits. Retiree medical costs are the biggest long-term challenge that state and local governments are yet to face. State and local governments have set aside $2.5 trillion to help pay pension benefits but nothing when it comes to medical benefits. Pat Anderson says that they are going to revolt and this is going to be a big financial burden on local governments.

They will then put pressure on the federal government to nationalize health care. The federal government also has a $2.3 trillion unfunded liability for medical and disability benefits promised to civil servants and military personnel who retire. Medicare has a $33.4 trillion unfunded liability. Social Security has a $4.6 trillion shortfall. Minneapolis has no liability because it doesn't offer retiree medical benefits. Governments have less freedom to cut retiree health care because most benefits were negotiated in union contracts.