State Healthcare Cost Trends Over Time: Compare the Right Numbers

A state's total healthcare spending, spending per resident, insurance premiums, and household medical bills answer different questions. To understand how healthcare costs have changed in your state, first decide which of those questions you want to answer.

For comparisons across states, start with spending per person from the same source and years. Then examine premiums and personal expenses separately to understand what the numbers might mean for your budget.

What state healthcare cost trends actually measure

The Centers for Medicare & Medicaid Services, or CMS, publishes State Health Expenditure Accounts that track personal healthcare spending. Its historical state series covering 1991 through 2020 documents a broad rise in spending in current dollars over that period. That does not establish that every state increased every year, or that household payments followed the same pattern. See the CMS state spending data by residence for available releases, tables, and definitions.

Personal healthcare spending includes payments for care and medical goods from multiple sources, including private insurance, Medicare, Medicaid, and patients. It is not a measure of bills paid directly by residents. It also differs from broader national health spending measures that include categories such as public health activity, administration, and investment.

• Total spending: The aggregate amount spent on healthcare within the dataset's defined scope.
• Spending per person: Total spending divided by the relevant population.
• Insurance premiums: Payments to maintain insurance coverage, potentially split between employers and workers.
• Out of pocket costs: Patient payments such as deductibles, copayments, coinsurance, and some expenses not covered by insurance. These generally exclude premiums.
• Provider prices: Amounts charged or paid for particular services. Billed charges and negotiated payments are different measures and should not be mixed.

These measures can move differently. Spending can rise because more care is delivered even when the price of a particular service stays unchanged. A premium increase also does not tell you whether a plan's deductible or provider network changed.

Total spending and spending per person tell different stories

Total healthcare spending helps describe the size of a state's healthcare economy. It is less useful for comparing spending across states with very different populations. A populous state can spend more overall without spending more per resident.

Consider a hypothetical state where annual spending rises from $100 billion to $120 billion while its population grows from 10 million to 12 million. Total spending increases 20%, but spending per person remains $10,000. Calling that a 20% increase in each resident's healthcare costs would be incorrect.

Spending per person removes the direct effect of population size, but it does not make states identical. Differences in age, health needs, services used, insurance coverage, and prices can still affect the result. Population adjustment is not the same as adjustment for those characteristics.

Check geography as well. CMS provides state spending estimates organized by residence and by provider location. Residence based estimates are generally the better starting point when your question concerns state residents, because some people cross state borders for treatment.

How to compare state costs across the same years

A fair comparison begins with a written definition. For example: annual personal healthcare spending per resident, from the same CMS release, in current dollars, using the same starting and ending years for every state. That definition prevents accidental comparisons between unrelated measures.

• Choose one source and release: Historical estimates can be revised, so use a consistent version of the data.
• Choose common years: Do not compare one state's five year change with another state's ten year change.
• Record the starting and ending levels: A growth rate alone hides whether a state started relatively high or low.
• Calculate both dollar and percentage changes: They answer different questions about the size of the increase.
• Inspect the intervening years: An endpoint comparison can conceal a temporary spike, decline, or disruption.

For a hypothetical example, suppose State A rises from $8,000 to $10,000 per resident over five years. Its increase is $2,000, or 25%. State B rises from $12,000 to $14,000 over the same period, an increase of $2,000, or about 16.7%.

State A has faster percentage growth, but State B has the higher ending spending level. Neither statement means that a particular resident pays those amounts. Both figures represent spending across payers, not a household bill.

To calculate percentage growth, divide the ending value by the starting value, subtract one, and multiply by 100. For an annualized growth rate, divide the ending value by the starting value, raise the result to the power of one divided by the number of years, subtract one, and multiply by 100. Do not simply divide the total percentage increase by the number of years.

Annualized rates help describe growth over periods of different lengths, but a state ranking should still use common years. Different periods may capture different economic conditions or disruptions.

Why inflation changes the interpretation

Current dollar figures, also called nominal figures, show spending in the dollars of each reported year. Inflation adjusted figures express spending in the purchasing power of a chosen base year. Both are useful, but they answer different questions.

Nominal spending describes the dollars flowing through the healthcare system. Inflation adjusted spending shows whether spending grew beyond a selected measure of price increases. A nominal increase can become a smaller increase, no change, or a decline after adjustment.

In another hypothetical example, spending per resident rises 20% while the chosen general price index rises 10% over the same period. Dividing 1.20 by 1.10 gives an inflation adjusted increase of about 9.1%, not exactly 10%. State the index and base year whenever you report the adjusted result.

The Bureau of Labor Statistics Consumer Price Index includes general and medical care measures. A medical care index answers a different question from a general inflation index, and neither should be treated as a direct measure of all prices paid by all healthcare payers. Use the adjustment specified by the source when reproducing its findings.

Changes over time also differ from cost differences between places. A common national inflation adjustment does not fully account for different local price levels. The Bureau of Economic Analysis publishes Regional Price Parities that provide context about geographic price differences, but these are not a substitute for state medical price data.

Premiums and out of pocket costs need their own comparison

State spending per person is a useful system measure, not a personal affordability forecast. For someone planning a move, actual plan premiums, employer contributions, deductibles, provider networks, and expected services may matter more than a state's position in a spending ranking.

The Agency for Healthcare Research and Quality publishes state estimates through the Medical Expenditure Panel Survey Insurance Component. These can help compare employer sponsored insurance premiums and employee contributions. Keep the coverage category and employer population consistent, such as single coverage at private sector establishments.

Marketplace premiums are another distinct measure. Compare the same coverage year, location, age assumptions, and plan category, and distinguish the full premium from the amount a person pays after any applicable financial assistance. A statewide average cannot replace a quote for a particular household.

Out of pocket trends also require careful definitions. A deductible is a plan feature, not proof that every enrollee paid that amount. An out of pocket maximum is not an expected annual bill, and premiums generally are not included in a plan's out of pocket limit.

Do not add average premiums to average state spending per person. Spending estimates already include payments financed through insurance, so combining these measures can double count money. Compare each measure separately before drawing conclusions about affordability.

Where to find comparable state healthcare cost data

Use the original publisher whenever possible, and read the definitions before downloading figures. A chart's publication date is not necessarily the year its data describe. Detailed state spending estimates can lag more current premium information.

• CMS State Health Expenditure Accounts: Use for historical personal healthcare spending by state, including residence based totals and spending per person. Check the release's available years and methodology.
• AHRQ Medical Expenditure Panel Survey Insurance Component: Use for employer sponsored insurance premiums, employee contributions, and selected plan characteristics. Review sampling uncertainty and estimate availability.
• Bureau of Labor Statistics: Use Consumer Price Index data for an explicitly defined inflation adjustment, with attention to what the chosen index covers.
• Bureau of Economic Analysis: Use Regional Price Parities and income data for additional context about geographic purchasing power and affordability.
• State insurance departments and Marketplace publications: Use for coverage specific premium information. Check whether a reported change concerns proposed rates, approved rates, or actual enrollment weighted premiums.

For out of pocket comparisons, look for a source that directly measures patient payments and supports the state estimates you need. Do not assume a national household survey produces reliable annual estimates for every state. Missing or statistically uncertain results should remain visible rather than being replaced with guesses.

Which states have had the largest increases?

There is no single defensible ranking without first naming the metric and period. A ranking of total nominal spending growth can differ substantially from a ranking of inflation adjusted spending growth per resident. Premium rankings answer another question entirely.

To identify the largest increases, select a common start and end year in the CMS residence based tables, calculate the change for every state using the same measure, and sort those results. Report the source, release, years, and inflation treatment with the ranking. Keep the District of Columbia clearly identified if it is included.

This guide does not name a fastest growing state because doing so without a defined comparison would suggest a precision the question does not support.

Questions to ask before trusting a state ranking

• Does the ranking identify the source, release, data years, and spending category?
• Does it measure total spending, spending per person, premiums, patient payments, or prices?
• Are the figures in current dollars or inflation adjusted dollars?
• Does it rank percentage growth, dollar growth, or the ending spending level?
• Could population changes, unusual starting years, or survey uncertainty affect the result?
• Does the evidence support an explanation, or merely show that a change occurred?

A trend alone cannot establish that a particular policy caused an increase or decrease. That conclusion requires analysis addressing other changes, not just a comparison of two dates. Likewise, a lower spending level does not by itself establish better access, better quality, or greater affordability.

How SakeOf fits into a personal cost comparison

State trends can help you frame questions about affordability, but they cannot review a medical bill or establish what help is available for a particular expense. For members, SakeOf's healthcare advocacy and fair price review address that more specific problem: getting help with provider billing questions and reviewing medical expenses rather than relying on a state average.

SakeOf is not insurance. It is a membership program combining healthcare advocacy, fair price review, direct service and discount benefits when selected, and voluntary member to member community funding for eligible medical expenses. Expense eligibility depends on the applicable program rules and review; a state's spending level does not establish eligibility or guarantee funding or savings.

If you are comparing healthcare arrangements before a move, check the benefits you would actually select and their availability in your destination. For example, SakeOf's zero copay telemedicine feature provides medically appropriate non emergency urgent care consultations at $0 per eligible consultation while active, subject to state law, provider availability, technology, and clinical and prescribing rules. It requires the Rx and Prescription Benefits feature to remain active. Care recommended during a consultation, such as imaging, labs, or an in person visit, is not included merely because telemedicine recommends it.

Use those specific terms, along with membership costs and your expected care needs, in your household comparison. Neither state spending averages nor a telemedicine benefit can predict your total future healthcare expenses.