In 2015, state governments across the country spent a combined $605 billion on health care, or about $1,880 per resident.
The physical and mental well-being of the population is the single largest financial obligation of state governments, and comprises well over one-quarter of total state direct spending. As is the case with most expenditures, health spending varies at the state level dramatically, from just over $1,000 per capita to well over $3,000 per person.
The major categories of health spending at the state level include Medicaid coverage, state-run hospitals and medical schools, and finally other health expenses and programs addressing needs such as community wellness, substance abuse, health inspection, and pollution control.
Among these three categories, it is Medicaid spending that accounts for the largest portion of total state expenditure, at about 80% of annual state health costs. 24/7 Wall St. reviewed health spending in all 50 states, ranked from lowest total combined state health expenditure per capita to highest. This measure includes only direct state spending, which excludes local and federal spending.
Generally, states spent more if they had more expansive Medicaid eligibility and benefits. This was particularly the case for those states that opted to expand Medicaid coverage under the Affordable Care Act. Only one of the states spending the most per capita on health care, Mississippi, did not opt to expand Medicaid. Of the 20 states that spent the least on health care, 12 have not expanded Medicaid.
Those states with more poor, disabled, and elderly residents, also often spent more per capita. Disabled people and those over 65 are the ones who most commonly need health care and receive state Medicaid spending. In all, nearly 25% of Medicaid recipients are 65 or older, institutionalized, or disabled.
To identify what each state spends on retirement, 24/7 Wall St. reviewed the detailed health care expenditures by state governments as well as state revenue and cash / security holdings, provided by the U.S. Census Bureau’s 2015 State and Local Finance data. The share of the population over 65, in poverty, and with a disability all came from the U.S Census’ American Community Survey for 2016.