Given California’s high cost of living, it’s rare for the state to rank among the least expensive places for anything.
But a new WalletHub study found Californians spend the third‑lowest share of their income on out‑of‑pocket health care costs.
“California residents enjoy a pretty high median annual income to offset those (health care) costs,” Chip Lupo, an analyst with WalletHub, said of the state’s ranking. “California’s in a good place, but there are some areas I think in which California could probably do a little bit better.”
Here’s WalletHub’s methodology, what the report found for California, and which states spend the most and least share of income on out‑of‑pocket health care.
WalletHub’s methodology
To determine how much a state’s residents’ annual income is going toward out-of-pocket health care costs, Lupo said WalletHub looked at the costs of doctor visits, dental visits, and optometrist visits, along with the price of over-the-counter ibuprofen and Lipitor. Then, the company totaled those prices and compared them against a state’s median household income.
“So that gives us an idea of how much a resident in a specific state is spending toward the cost of health care,” according to Lupo.
From there, the company ranked the 50 states.
“Now, this is a study where it’s good to be at the bottom, so the higher the number, the less the household is paying towards health care costs. So, the higher the number, the better,” Lupo said.
Lupo said WalletHub found its methodology to be the “easiest and the most comprehensive way to look” at health care costs.
“Because once you get into health insurance premiums and access, that’s an entirely different conversation, because it’s not one size that fits all,” Lupo said.
A look at California’s ranking
California is the third lowest, ranking 48th on WalletHub’s list.
“California has an advantage here, because the average median household income is very high,” Lupo said. “It’s just under $130,000, which is the sixth highest in the country, well above the $81,000 national average.”
In addition, Lupo said, the Golden State has “some pretty moderate health care costs,” such as the price of Lipitor in the state, which ranks sixth lowest in the nation.
The out-of-pocket cost for a doctor visit in the state stands at about $139, which ranks among the top 15 states, Lupo said.
Annually, the average of out-of-pocket health care costs in California totaled about $465.
“So, California is kind of in the middle of the pack there at about $465 a year per household, so right here in the middle, 22nd overall, so that’s not too bad,” Lupo said.
The state does have higher costs for optometry care, which costs about $161 per visit, and dental visits are the 15th highest in the nation at about $133, according to Lupo. Additionally, the state ranks sixth-highest for the price of ibuprofen.
“So, it’s kind of a mixed bag for California,” Lupo said. “There are some that are some areas that are affordable or average, and then some, a little bit high, but again, California residents enjoy a pretty high median annual income to offset those costs.”
Overall, the state spends about 5.6% of its median monthly household income on out-of-pocket health care costs.
“Compare that with Alaska, which spends the highest. They spent almost twice as much, 10% or so, 10 cents of every dollar in Alaska is going towards health care costs, primarily because the costs of services and products are very, very high in Alaska,” Lupo said.
Top 10 states where share of out-of-pocket health care costs are highest
Here are the top 10 states on WalletHub’s list of places where out-of-pocket health care costs are highest, along with their ranking and cost of health care as a share of median monthly household income.
States where share of out-of-pocket health care costs are lowest
Here are the 10 states where out-of-pocket health care costs are lowest, along with their ranking and cost of health care as a share of median monthly household income.
This article originally appeared on Palm Springs Desert Sun: Californians spend less share of income on out‑of‑pocket health care
Reporting by Daniella Segura, USA TODAY NETWORK / Palm Springs Desert Sun
USA TODAY Network via Reuters Connect
