Spending on Health Care Varies by State, Age, Income and Gender

The amount spent on health care per capita varies from state to state.  CMS conducted a study to determine the per capita spending in each state as a base-line to see how per capita spending changes after implementation of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148).  The study found that wealthy, elderly, women living in areas of the country with a high population density tend to spend the most on health care.

The national average per capita spending on health care in 2009 was $6,815.  Per capita spending on health care increased 82 percent increase during the ten years from 1999 when the per capita spending on health care was $3,782.  Personal health care spending includes the total amount spent to treat individuals with specific medical conditions, but excludes expenditures resulting from government administration, net costs of health insurance, government public health activity, non-commercial research, and investment in structures and equipment.

CMS reports that Massachusetts, Alaska, Connecticut, Maine, Delaware, New York, Rhode Island, New Hampshire, North Dakota, and Pennsylvania had the highest rate of per capita spending on health care ranging from 17 to 29 percent above the national average.  Utah, Arizona, Georgia, Idaho, Nevada, Texas, Colorado, Arkansas, California and Alabam ahad the lowest per capita spending on personal health care ranging from 8 to 26 percent below the national average.

Income, Gender and Age Factors in Health Care Spending

Income has a positive relationship to personal health care spending.  Individuals with more money seem to spend more on health care. Eight of the top 10 states in personal health care spending are also in the top third of states with individuals with the highest average income, and six of the bottom 10 states in personal health care spending were in the lower third of average annual income.  Additionally, eight of the 10 lowest per capita spending on health care states were in the top third of states with high rates of uninsured.

More importantly states with a higher than average per capita spending on personal health care had a higher percentage of women aged 20 to 44, the age group of women who spend 73 percent more health care than their male counterparts. Furthermore, the share of the population who are elderly in these states averaged 14.0 percent in 2009, compared to 11.2 percent for the 10 states with the lowest spending.

Medicare Spending

These factors are also reflected in Medicare and Medicaid spending per capita. Elderly women spend more than their male counterparts on health care. The study found that nine of the 14 states with higher than average per enrollee Medicare spending had a share of female enrollees higher than the national average.

The national average of Medicare personal health care spending per enrollee was heavily influenced by a small group of states with higher-than-average spending per enrollee. Just fourteen states had per enrollee Medicare spending levels greater than the national average in 2009 while 36 states had Medicare spending per enrollee below the national average.  The states with higher than average Medicare spending tended to be in the Eastern United States in areas with higher population densities and the states with lower than average Medicare spending per enrollee tended to be less densely populates areas with younger populations and lower ratios of physicians and specialists as a proportion of the population.