With out-of-pocket health care costs rising sharply in recent years, the personal-finance company WalletHub today released its report on the States Where People Spend the Most & Least on Health Care to highlight where Americans face the greatest challenges affording essential care.
To identify where residents spend the largest share of their earnings on health care, WalletHub analyzed the costs of five key health care components in all 50 states, then combined those expenses and compared them with each state’s median household income.
| Highest % of Income Spent | Lowest % of Income Spent |
| 1. Alaska (10.08%) | 41. South Carolina (6.13%) |
| 2. Oregon (9.32%) | 42. Minnesota (6.09%) |
| 3. Maine (9.30%) | 43. Rhode Island (6.09%) |
| 4. Mississippi (9.18%) | 44. Florida (6.05%) |
| 5. West Virginia (9.14%) | 45. Colorado (6.05%) |
| 6. New Mexico (9.07%) | 46. Nevada (5.87%) |
| 7. North Carolina (8.78%) | 47. New Jersey (5.81%) |
| 8. Montana (8.62%) | 48. California (5.64%) |
| 9. South Dakota (8.60%) | 49. Virginia (5.62%) |
| 10. Louisiana (8.13%) | 50. Utah (5.11%) |
To view the full report and your state’s rank, please visit:
https://wallethub.com/edu/
“Sharp increases in health care costs in recent years have made it difficult for some people to seek essential care. Even in states with lower-than-average health care prices, residents’ incomes may not be enough to keep up with the cost, especially since virtually every part of Americans’ budgets have been impacted by inflation over the past few years.”
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“People in Alaska spend the most on health care, with essential medical visits and medicine costing as much as 10.1% of the median monthly household income, the highest percentage in the country. For comparison, Utah residents only spend around 5% of their income for the same services and medicines, the lowest percentage.”
- Chip Lupo, WalletHub Analyst
Expert Commentary
What tips do you have to reduce health care costs?
“Much like your car, preventive maintenance is the best thing you can do to reduce health care costs. Exercise regularly, do not sit in front of a screen for too long a period of time without getting up and walking around, and watch what you eat. As Michael Pollan says, ‘Eat food, not too much, mostly plants.’”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How important is budgeting when it comes to saving money on health care?
“The average American family generally has less than $1000 available for emergencies that come up so setting money aside in a tax deferred Health Savings Account (HSA) is a great way to have money set aside for when a medical emergency comes up. Unfortunately, health emergencies are what is called an ‘unsought good.’ No one wants or expects them so shopping around for a good price on health care does not happen. The best thing the consumer can do is to put aside money for the time when an emergency occurs.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
How is the current social and economic environment influencing household spending on health care?
“The coming cuts to Medicaid will make a lot of consumers forgo preventative health care, meaning health problems that could have been dealt with relatively inexpensively if caught early will now be caught later and cost much more to deal with. Couple that with the number of people dropping the insurance they purchased through the Affordable Care Act due to insurance's increasing costs, and we can expect to see a greater percentage of the average household budget going towards health care.”
Scott Thorne, Ph.D. – Instructor, Southeast Missouri State University
7 Tips for Saving on Health Care
- Get insured. It is much better for your wallet to be insured than uninsured. While health insurance premiums can be expensive, being insured protects you from extremely expensive events like hospitalizations or surgeries because you’ll only have to pay a certain maximum amount out of pocket. Without insurance, you’re on the hook for every dollar your care costs.
- Use preventative care. You should use preventative medical care every year – for example, getting an annual physical and having dental checkups every six months. This can help you prevent health issues from happening or catch them before they become serious. The cost for these services will be miniscule (or sometimes even $0 with insurance) compared to treating health conditions that you could have avoided.
- Budget carefully. You should always consider health care costs when you make a budget. Not only should you make sure to budget money for insurance premiums, but you should also set aside money each month until you have an emergency fund that can cover at least six months’ worth of expenses. That can help provide a buffer in case you get hit with major medical bills unexpectedly.
- Try to lead a healthy lifestyle. As they say, an apple a day keeps the doctor away. Pairing a nutritious diet with regular exercise can help you stay in good health and leave your body less vulnerable to sickness. The healthier you are, the less you’ll have to spend on health care.
- Try telehealth. It’s becoming more and more common to have virtual visits with doctors. These visits may be less expensive than going to the doctor in person, although they may not be the best fit for all medical situations.
- Use an HSA. With a health savings account, you can put aside pre-tax dollars from your payroll to use for health care. That lowers your taxable income, which leads to savings at tax time. In addition, contributions you make outside of your payroll are also tax deductible.
- Use a rewards credit card. If you pay for your medical bills with a rewards credit card, you can earn back a portion of the cost. Just make sure to pay off the card in full every month, or you’ll undo all your savings with costly interest.
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