The cost of healthcare is something that’s probably on your mind a lot. You need those doctor visits, medications, and procedures to take care of yourself, but man can those medical bills add up. Have you ever wondered where in the country you can find the most and least expensive healthcare? Well, you’re in luck because this article will break down the most and least expensive states for healthcare in 2024.
We’ll look at factors like insurance premiums, out-of-pocket costs, and overall healthcare spending to show you which states are costing residents the most and least for their healthcare. You might be surprised by some of the states at the top and bottom of the list! So get ready to find out if your state made the most or least expensive list for healthcare costs this year.
Healthcare Costs by State in 2024
The Most Expensive States
If you live in Alaska, Connecticut or Massachusetts, better brace yourself for some shockingly high healthcare costs. These states have the highest average healthcare insurance premiums in the country. Alaskans face premiums nearly double the national average, owing to high costs of living and providing care in remote areas. Connecticut and Massachusetts also have premiums well above average, likely due to high costs of living and the comprehensive coverage mandated in these states.
The Least Expensive States
On the bright end of the spectrum, states like Utah, Idaho and New Mexico have the lowest healthcare premiums. Premiums in these states are 15-30% below the national average. Lower costs of living and fewer mandated benefits help keep premiums down. Rural states also tend to have lower premiums, as there are fewer healthcare facilities and providers to pay for.
Why Such Variation?
There are a few key reasons for the wide variation in healthcare costs across states. First, the cost of living and doing business in each state impacts how much providers charge for services.
Second, states have different mandated benefits, e.g. some require coverage for alternative therapies or fertility treatments. Finally, states have different risk pools – populations in some states may be less healthy overall, driving up costs.
The disparity in healthcare costs based on location alone can seem unfair. However, there are efforts underway to make insurance more affordable across all states. Subsidies, non-profit co-ops, and healthcare associations are working to cut costs while still providing quality care for all. The road ahead isn’t easy, but progress is being made toward more equitable and affordable healthcare in America.
Why Healthcare Costs Vary by State
Cost of Living and Healthcare Infrastructure
The cost of living in a state plays a big role in healthcare costs. Places with a higher cost of living, like Hawaii and California, often have higher healthcare costs. States with more advanced healthcare infrastructure and a greater supply of hospitals, physicians, and medical equipment also tend to have higher costs.
Population Density and Health
States with larger populations and higher population densities usually have higher healthcare costs. There are simply more people accessing healthcare services. The overall health of a state’s population also matters. States with populations that are older, less healthy, or have higher rates of chronic disease tend to spend more on healthcare.
Regulation and Litigation
How strictly a state regulates healthcare and how often medical malpractice lawsuits occur there also impact costs. Stricter regulations and more frequent litigation both increase healthcare spending. Doctors often practice “defensive medicine” in these states, ordering extra tests and procedures primarily to avoid lawsuits rather than for medical reasons.
Medicaid Expansion
Whether or not a state expanded Medicaid under the Affordable Care Act affects healthcare costs. States that expanded Medicaid have more people with health insurance, so providers are able to shift some costs to insurance companies that would otherwise be unpaid. In states that didn’t expand Medicaid, more people remain uninsured, and providers have to charge private insurers and patients higher rates to make up the difference.
As you can see, where you live in the U.S. has a lot to do with what you’ll pay for healthcare. Numerous factors outside of your control contribute to the healthcare costs in your state. The good news is some states have found ways to balance these factors and provide high-quality care at lower cost. Maybe it’s time to consider a move?
The 5 Most Expensive States for Healthcare in 2024
Alaska
Healthcare in The Last Frontier has never come cheap, and 2024 is no exception. Alaska tops the list for the most expensive healthcare, due in large part to its remote locations and harsh climate. The cost of living in Alaska is over 50% higher than the national average, and healthcare costs follow suit. Premiums are the highest in the nation at an average of $1,062 per month for individual coverage.
Rural Alaskans pay even more due to limited access and infrastructure. If you’re planning to move to or retire in Alaska, budget accordingly for significantly higher healthcare costs.
Hawaii
The island life comes at a price. Hawaii ranks second for the most expensive healthcare in 2024. The state’s remote island geography makes costs higher across the board. Healthcare is no exception, with premiums averaging $961 per month for individual coverage. Hawaii also has the highest costs for prescription drugs and emergency room visits. However, Hawaii does have very high life expectancies and ranks well for senior care. If the thought of retirement in paradise appeals to you, be prepared to pay paradise prices for your healthcare.
Massachusetts
Massachusetts is a pioneer in healthcare reform, but its costs remain sky-high. The Bay State has the third most expensive healthcare in 2024, in large part due to high costs of living and doing business in the state. Health insurance premiums average $933 per month. While Massachusetts has a low uninsured rate thanks to healthcare reform, healthcare spending per person is the second highest in the nation. The good news is Massachusetts also has one of the highest life expectancies and best healthcare systems in the U.S. You get what you pay for.
Connecticut
The Constitution State is better known as the Costly Care State. Connecticut ranks fourth for the most expensive healthcare in 2024. Monthly health insurance premiums average $920, among the highest in the country. Connecticut also has the highest healthcare costs relative to income. The state does have a high number of top-ranked hospitals and physicians, but you will pay a premium for access to them. Healthcare costs in Connecticut show no signs of slowing down, so budget wisely if you live or plan to retire here.
New York
The Empire State is fittingly named when it comes to healthcare costs. New York has the fifth most expensive healthcare in the nation for 2024. Health insurance premiums in New York average $904 per month. The state also has especially high costs for hospital stays, physician visits, and prescription drugs. However, New York offers a high density of world-class hospitals, physicians, and medical research institutions. Quality comes at a cost in New York. Factor the state’s high healthcare expenses into your budget if you call New York home.
The 5 Least Expensive States for Healthcare in 2024
When it comes to affordable healthcare, some states have it better than others. If lowering your healthcare costs is a priority, consider moving to one of these budget-friendly states.
Wyoming
Wyoming has some of the lowest healthcare costs in the nation. Healthcare premiums are over 30% lower than the national average. Wyoming residents benefit from lower costs of living and healthcare services. The state’s low population density also contributes to lower healthcare utilization and spending.
Mississippi
Mississippi consistently ranks as one of the most affordable states for healthcare. Healthcare costs are over 25% lower than the national average. Mississippi has a low cost of living which translates to lower healthcare costs. Healthcare providers also face less demand from the state’s small, rural population.
Arkansas
Arkansas offers healthcare costs nearly 30% below the national average. Low costs of living combined with limited access to healthcare in rural areas of the state help keep healthcare costs down. Arkansas did not expand Medicaid under the ACA, so many residents remain uninsured which also contributes to lower healthcare spending.
Oklahoma
Oklahoma residents enjoy healthcare costs almost 25% lower than the national average. Like other affordable states, Oklahoma has an overall lower cost of living and limited access to healthcare in rural, less populated areas of the state. Oklahoma also has a higher percentage of uninsured residents which reduces healthcare utilization and spending.
New Mexico
Healthcare in New Mexico costs just over 20% less than the national average. Much of New Mexico is rural with limited access to healthcare services. A large portion of New Mexico residents live in poverty and remain uninsured which limits healthcare spending in the state. Strong cultural influences also promote limited utilization of healthcare services for some residents.
While states with lower costs of living and limited healthcare access may seem appealing, reduced healthcare spending often means fewer services and resources for residents. There are trade-offs to consider with any move. But if rock-bottom healthcare premiums are your top priority, these states may just fit the bill.
How to Save on Healthcare Costs No Matter Where You Live
Compare health insurance plans
The cost of health insurance premiums and out-of-pocket costs can vary significantly between plans. Compare options like HMOs, PPOs, and high-deductible health plans from different insurers to find one that meets your needs at the lowest price. Plans with higher deductibles typically have lower premiums. If you’re generally healthy, a high-deductible plan paired with a health savings account (HSA) may save you money.
Use tax-advantaged accounts
HSAs and flexible spending accounts (FSAs) allow you to set aside pre-tax money for medical expenses. Contributions to an HSA are tax-deductible, and withdrawals for eligible expenses are tax-free. Not all plans qualify for an HSA, but most qualify for an FSA. Take advantage of these accounts to lower your taxable income and reduce your healthcare costs.
Save on prescriptions
Ask your doctor if generic or over-the-counter medications can be substituted for brand name drugs. Use coupons or discount cards for prescriptions not covered by your insurance. Some pharmacies and retailers like Walmart and Kroger offer certain generic drugs for as little as $4 for a 30-day supply. For mail-order prescriptions, check if your insurer offers a lower co-pay or additional discounts for using their preferred mail-order pharmacy.
Negotiate costs
Don’t be afraid to ask if fees for hospital stays, medical procedures, dental work or other healthcare services can be reduced or waived. Many providers and healthcare facilities will work with patients to set up an affordable payment plan or find ways to lower the total bill. Discuss options like receiving treatment from doctors-in-training, having procedures done at an outpatient clinic instead of a hospital, or scheduling multiple appointments on the same day when possible.
Healthcare costs continue to rise, but with some savvy moves you can reduce your healthcare spending no matter which state you call home. Compare plans, use tax-advantaged accounts, save on prescriptions, and negotiate fees to find the most affordable options available to you. Your wallet will thank you for it.