With out-of-pocket health care expenditures rising sharply in recent years, a report on States Where People Spend the Most & Least on Healthcare has released from the personal-finance website WalletHub to shed light on where Americans are having the most trouble affording essential care.

Where are people spending their greatest percentage of earnings on health care?

WalletHub analyzed the prices of five key health care components in each of the 50 states, then added these costs together and compared them to the median household income. New Jersey households spend 9.40% of their income on healthcare costs.

Highest % of Income Spent Lowest % of Income Spent
1. Mississippi (18.66%)      41. Utah (11.60%)
2. Louisiana (17.82%)        42. California (11.43%)
3. West Virginia (16.24%)   43. New Hampshire (11.41%)
4. Arkansas (16.23%)         44. Virginia (11.17%)
5. Oklahoma (16.11%)        45. Colorado (11.14%)
6. New Mexico (15.78%)      46. Rhode Island (10.91%)
7. Alaska (15.65%)              47. Connecticut (10.72%)
8. North Carolina (15.37%)   48. Massachusetts (10.00%)
9. Alabama (15.10%)            49. New Jersey (9.40%)
10. Kansas (14.77%)             50. Maryland (9.03%)

To view the full report and your state’s rank, please visit:https://wallethub.com/edu/states-where-people-spend-the-most-least-on-health-care/144534

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.

“People in Mississippi spend the most on health care, with essential medical visits and medicine costing as much as 18.7% of the median monthly household income, the highest percentage in the country. For comparison, Maryland residents only spend around 9% of their income for the same services and medicines, the lowest percentage,” according to WalletHub Analyst Chip Lupo.

How to reduce health care costs

For the average person, the best thing they can do is practice some preventive health – eat a balanced diet, drink plenty of water, get adequate rest, and some regular exercise. These few things can prevent the expensive health care that comes up when you ‘let yourself go.’

“If you need to see a doctor or go to a hospital, be sure you check with your insurance plan and go to one that is contracted with your insurer. So many people get surprised when they find out after the fact that the services they got were not covered by insurance because of that important detail. If you can, get a regular checkup – prevention is the best medicine for keeping your health care costs under control.”
Jeff Helton, PhD, CMA, CFE, FHFMA, NREMT – Academic Director, Health Administration Programs, CU Denver Business School

Associate Professor, Florida Atlantic University, Patrick Bernet says:

Lifestyle is the single largest influence on health. Individual choices relating to diet, vaccination, alcohol consumption, tobacco use, drug use, exercise – all contribute to rising rates of expensive chronic conditions. It also helps to choose the right health insurance policy.

Consumers must estimate what services they will need and which plan leaves them with the lowest overall spending. A plan with high copays but low premiums might work for someone in good health because they do not need medical care often. But someone with a chronic condition who needs frequent tests, visits, and specialists might do better with a low copay-higher premium plan.

How important is budgeting when it comes to saving money on health care?

Financial planning and budgeting are extremely important when it comes to saving money on your healthcare costs. Throughout the year you get an idea of what future healthcare costs could entail, such as routine testing or potential procedures that may require additional expenses. These types of encounters often have physician administrative fees or facility fees that may not be covered by your health plan.

You can plan better for these expenses that are not covered and set aside money within your tax-free health savings account. You also may need to budget for prescription co-pays and other routine office visit co-pays if you must have regular interactions with your provider. These may exceed your health savings account allowance, so be prepared to pay these expenses on a routine basis. Budgeting will also make sure that you’re receiving your requested reimbursements from your healthcare insurance company. Planning for healthcare expenses on a prospective basis is no different than trying to understand your grocery bill or other discretionary spending. This way you can have an emergency fund already allocated should something unusual come up during the year, Mark Kato, DHA, MBA – Assistant Professor, Saginaw Valley State University.

“Reliable budgeting is extraordinarily difficult in the U.S.’s distinguishably complex, decentralized, highly privatized, employer-based, ‘free market’ health care system – naked and vulnerable without comprehensive, objective, and reliable health technology assessment (HTA) mechanisms in federal and state government decision-making. Free markets only work reliably in an environment where accurate, objective, reliable information flows, and misinformation is thereby checked. The U.S. does not provide that environment in health care – literally in matters of life and death.”
Michael J. Malinowski – Professor, Louisiana State University and Lawrence B. Sandoz, Jr. – Professor, Louisiana State University

How is the current social and economic environment influencing household spending on health care?

Recent policies that reduce safety nets and increase general economic uncertainty will put increasing pressure on household decisions regarding health. First, real incomes are decreasing – both due to flat wages and increased prices due to tariffs.There is less left for spending on healthcare. In this environment, it is important for consumers to pay attention to maintaining a healthy lifestyle and keeping up with annual physical exams and screening,according to Patrick Bernet – Associate Professor, Florida Atlantic University.

Direct-to-consumer advertising of health care services is definitely increasing health care costs. Those ‘new’ treatments are usually more expensive than established treatments without a lot of additional benefit. Because those new treatments are usually covered by insurance, patients tend to want the ‘latest’ treatments because of a slick marketing pitch. Physicians are now good business people and are looking to market new services to get more patients to treat. Again, with insurance, the patient has little incentive to not follow a recommendation for a new service that may or may not yield any greater benefit than an established treatment.

Jeff Helton, PhD, CMA, CFE, FHFMA, NREMT – Academic Director, Health Administration Programs, CU Denver Business School

7 Tips for Saving on Health Care

1. Get insured. 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.

2. Use preventative 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.

3. 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.

4. 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.

5. Try telehealth. It’s becoming 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.

6. Use an HSA. With a health savings account (HSA), 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.

7. 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.