With individual health insurance premiums rising significantly in recent years, the personal-finance company WalletHub today released its report on the States Where People Spend the Most & Least on Health Insurance to shed light on where Americans are struggling the most to stay covered.
To identify where Americans are shelling out the most and least for health insurance, WalletHub analyzed average premiums in each of the 50 states, then compared it to the median household income.
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/
“Inflation has driven up health insurance premiums significantly in recent years, making it harder and harder for Americans to afford proper health care. Being without insurance is even more dangerous, though, as medical debt is one of the most common reasons people file for bankruptcy. People in certain states feel the pressure of high premiums more than others, as they can cost as much as 21% of the median income in some states and less than 5% in others.”
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“West Virginians spend nearly 21% of their income on health insurance premiums, the highest share in the nation. The state's average monthly silver-plan premium is the third-highest in the country, while its median household income of $59,608 is the second-lowest.”
- Chip Lupo, WalletHub Analyst
Expert Commentary
What tips do you have to reduce health insurance costs?
“One way to reduce health insurance costs is to choose a plan that matches your expected healthcare needs. Individuals who are generally healthy and rarely visit the doctor may benefit from a high-deductible health plan with lower monthly premiums, while those with chronic health conditions may need a more comprehensive plan despite higher premiums. Maintaining a healthy lifestyle through proper diet, regular exercise, avoiding tobacco and drug use, and limiting alcohol consumption can also reduce medical expenses over time and make lower-cost insurance options available. Unfortunately, the factors affecting health insurance costs are largely outside of an individual’s ability to control, but maintaining a healthy lifestyle is the one variable that someone can influence.”
Chris Douglas – Professor, The University of Michigan-Flint
“The best way to reduce health insurance costs is to take as high a deductible as your finances will allow. Insurance is meant to cover expenses that would otherwise devastate a family's finances so paying out of pocket for lower expenses will allow you to take a higher deductible. Much like reducing car insurance costs, taking steps to improve your health such as eating better and losing weight, reducing alcohol consumption, quitting smoking and getting regular checkups will all help reduce insurance costs.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How important is budgeting when it comes to saving money on health insurance?
“Budgeting is essential because health insurance is a necessary expense that protects households from potentially catastrophic medical costs. Incorporating health insurance premiums, deductibles, and out-of-pocket expenses into a monthly budget can help families avoid financial hardship when unexpected medical needs arise.”
Chris Douglas – Professor, The University of Michigan-Flint
“Budgeting is important. Ideally, a family should have enough in savings to cover 3- 6 months of expenses with no income. However, only about half the US population has that amount put aside.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How is the current social and economic environment influencing household spending on health insurance?
“Healthcare costs have risen faster than the rate of inflation for decades. This has stressed budgets at all levels: individual, businesses, and governments. Efforts to slow the growth of healthcare spending have had limited success, and healthcare costs will likely continue to rise as the population ages and there are shortages of healthcare providers.”
Chris Douglas – Professor, The University of Michigan-Flint
“By ending the subsidies of insurance plans available on the ACA marketplace, the current administration has driven up the costs of health insurance, causing many individuals to opt to drop their health insurance, choosing to rely on urgent care and emergency rooms which are far more costly to society.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
To identify where Americans are shelling out the most and least for health insurance, WalletHub analyzed average premiums in each of the 50 states, then compared it to the median household income.
| Highest % of Income Spent | Lowest % of Income Spent | |
| 1. West Virginia (20.86%) | 41. Colorado (6.72%) | |
| 2. Vermont (19.05%) | 42. Rhode Island (6.67%) | |
| 3. Wyoming (17.16%) | 43. Hawaii (6.37%) | |
| 4. Arkansas (14.87%) | 44. California (6.32%) | |
| 5. Mississippi (14.05%) | 45. New Jersey (6.23%) | |
| 6. Alaska (13.18%) | 46. Minnesota (5.89%) | |
| 7. Louisiana (12.58%) | 47. Virginia (5.86%) | |
| 8. Tennessee (12.19%) | 48. Massachusetts (5.49%) | |
| 9. Alabama (11.85%) | 49. New Hampshire (4.77%) | |
| 10. Montana (11.27%) | 50. Maryland (4.66%) |
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/
“Inflation has driven up health insurance premiums significantly in recent years, making it harder and harder for Americans to afford proper health care. Being without insurance is even more dangerous, though, as medical debt is one of the most common reasons people file for bankruptcy. People in certain states feel the pressure of high premiums more than others, as they can cost as much as 21% of the median income in some states and less than 5% in others.”
–
“West Virginians spend nearly 21% of their income on health insurance premiums, the highest share in the nation. The state's average monthly silver-plan premium is the third-highest in the country, while its median household income of $59,608 is the second-lowest.”
- Chip Lupo, WalletHub Analyst
Expert Commentary
What tips do you have to reduce health insurance costs?
“One way to reduce health insurance costs is to choose a plan that matches your expected healthcare needs. Individuals who are generally healthy and rarely visit the doctor may benefit from a high-deductible health plan with lower monthly premiums, while those with chronic health conditions may need a more comprehensive plan despite higher premiums. Maintaining a healthy lifestyle through proper diet, regular exercise, avoiding tobacco and drug use, and limiting alcohol consumption can also reduce medical expenses over time and make lower-cost insurance options available. Unfortunately, the factors affecting health insurance costs are largely outside of an individual’s ability to control, but maintaining a healthy lifestyle is the one variable that someone can influence.”
Chris Douglas – Professor, The University of Michigan-Flint
“The best way to reduce health insurance costs is to take as high a deductible as your finances will allow. Insurance is meant to cover expenses that would otherwise devastate a family's finances so paying out of pocket for lower expenses will allow you to take a higher deductible. Much like reducing car insurance costs, taking steps to improve your health such as eating better and losing weight, reducing alcohol consumption, quitting smoking and getting regular checkups will all help reduce insurance costs.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How important is budgeting when it comes to saving money on health insurance?
“Budgeting is essential because health insurance is a necessary expense that protects households from potentially catastrophic medical costs. Incorporating health insurance premiums, deductibles, and out-of-pocket expenses into a monthly budget can help families avoid financial hardship when unexpected medical needs arise.”
Chris Douglas – Professor, The University of Michigan-Flint
“Budgeting is important. Ideally, a family should have enough in savings to cover 3- 6 months of expenses with no income. However, only about half the US population has that amount put aside.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How is the current social and economic environment influencing household spending on health insurance?
“Healthcare costs have risen faster than the rate of inflation for decades. This has stressed budgets at all levels: individual, businesses, and governments. Efforts to slow the growth of healthcare spending have had limited success, and healthcare costs will likely continue to rise as the population ages and there are shortages of healthcare providers.”
Chris Douglas – Professor, The University of Michigan-Flint
“By ending the subsidies of insurance plans available on the ACA marketplace, the current administration has driven up the costs of health insurance, causing many individuals to opt to drop their health insurance, choosing to rely on urgent care and emergency rooms which are far more costly to society.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
Money-Saving Health Insurance Tips
- Make sure you have at least some coverage. As expensive as health insurance premiums can be, not having coverage can be far more costly if you experience a major medical emergency. Insurance plans have out-of-pocket maximums that put a hard limit on how much you can owe.
- Budget well. Always include health insurance costs among the first things that you put into your budget, as coverage is essential. Then, set aside additional money each month until you have an emergency fund built that can cover 3-6 months’ worth of expenses. You can dip into your emergency fund when you have big medical expenses and need to pay money toward your deductible.
- Consider high-deductible plans if you’re healthy. Plans with high deductibles tend to have lower monthly premiums. They essentially bank on you not needing much care during an average year. If you don’t have any big medical expenses, they can save you a lot of money. The tradeoff is that if you do have a medical emergency, you’ll have higher out-of-pocket costs than with lower-deductible plans.
- Work at a job that covers your health insurance. Many Americans get their health insurance premiums covered through their employer. If yours doesn’t offer this benefit, you may want to consider switching jobs.
- Stay on your parents’ insurance. Under the Affordable Care Act, young people can stay on their parents’ insurance policies until they’re at least 26 years old.
- Use preventative care. Many insurance plans provide at least some types of preventative care, such as an annual physical exam and certain immunizations and screenings at no additional cost. Taking advantage of these free benefits can also help prevent future medical problems, which is good for both your health and your wallet.
- Opt for in-network providers. Going to an in-network doctor will be much cheaper than one that’s outside your network. Plus, health care plans often have separate out-of-pocket maximums for in-network and out-of-network care.
More From WalletHub
- States Where People Spend the Most & Least on Health Care
- States Where People Spend the Most & Least on Groceries
- States Where People Spend the Most & Least on Housing
- Best & Worst States for Health Care
- Best States to Live In
- States With the Best & Worst Budgeters
- Changes in Inflation by City
- Best & Worst State Economies
- States Where People Have the Highest Income
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