Healthcare spending rises over five years in the U.S., but takes a smaller slice of salaries in most states – in MI, costs rise nearly 16.4%, but burden holds at 14%!
- Healthcare costs have increased by $1,589 (20.9%) in five years, reaching an average of $9,195 per person across the United States.
- Despite rising costs, Americans spent 13% of their salary on healthcare in 2023, down from 14% in 2019.
- Kentucky and Louisiana are the only states where residents now spend a higher percentage of their income on healthcare compared to five years ago.
A new study by Steno Health reveals that while healthcare costs continue to rise across America, wage growth has actually reduced the financial burden on most households when compared to pre-pandemic levels.
The research analyzed healthcare spending and income data from 2019 through 2023, finding that the average American’s healthcare costs rose by $1,589 over this period – a 20.9% increase. During the same timeframe, the typical salary grew by 24.9%, from $55,567 to $69,418.
|
Year |
Average healthcare cost |
Average salary |
Percentage of salary spent on healthcare |
|
2019 |
$7,605 |
$55,567 |
14% |
|
2023 |
$9,195 |
$69,418 |
13% |
|
Change |
+20.9% |
+24.9% |
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“The data shows a surprising bright spot in healthcare affordability,” said Alex Milani, medical director at Steno Health. “Though medical costs keep climbing, they’re taking a smaller bite out of the average paycheck.”
Michigan’s findings
In Michigan,
residents went from spending $7,203 on healthcare in 2019 to $8,381 in 2023, a 16.4% increase. Over the same five-year period, the average salary in Michigan rose from $48,577 to $60,865, a 25.3% increase.
This means that healthcare spending as a percentage of income actually decreased, going from 15% in 2019 to 14% in 2023 – a change of 1 percentage point.
|
Year |
Average healthcare cost |
Average salary |
Percentage of salary spent on healthcare |
|
2019 |
$7,203 |
$48,577 |
15% |
|
2023 |
$8,381 |
$60,865 |
14% |
|
Change |
+16.4% |
+25.3% |
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National findings
The largest improvements in affordability occurred in South Dakota, where the percentage of income spent on healthcare dropped from 19% to 16%, and in Idaho, Montana, Washington, and New Hampshire, all showing a two-percentage point decrease.
While most Americans are spending the same – and sometimes even less – proportion of their salaries in healthcare costs since 2019, two states have seen an increase in the percentage of income dedicated to healthcare.
Kentucky residents now spend 17% of their $55,063 annual salary on healthcare (an average of $9,463 per year), up from 16% in 2019. In Louisiana, the share has risen from 15% to 16%, with residents earning an average of $58,661 and spending $9,576 annually on healthcare.
The states with the highest and the lowest percentage points change in U.S. healthcare spending and salary (2019–2023)
|
State |
Percentage of income spent on healthcare (2019) |
Percentage of income spent on healthcare (2023) |
Change |
|
South Dakota |
19% |
16% |
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|
Idaho |
15% |
13% |
-2 ppt |
|
Montana |
16% |
14% |
-2 ppt |
|
Washington |
13% |
11% |
-2 ppt |
|
New Hampshire |
15% |
13% |
-2 ppt |
|
Kentucky |
16% |
17% |
+1 ppt |
|
Louisiana |
15% |
16% |
+1 ppt |
Regional analysis reveals significant disparities.
Southern states face the highest burden, with three of the top five states for healthcare spending as a percentage of income located in this region.
West Virginia leads the nation in healthcare spending, with residents allocating 21% of their $52,813 annual income to healthcare ($11,089) – a figure unchanged since 2019.
Close behind is Alaska, where 18% of the average $71,309 salary goes toward healthcare ($13,015 annually) – down 1% from 2019. Delaware, Kentucky, and Indiana follow at 17% each.
Western states generally spend the smallest portion of income on healthcare, with Utah, Washington, and Nevada all at 11%.
States spending the highest and the lowest percentage of their income on healthcare
|
State |
Percentage of income spent on healthcare (2023) |
Healthcare cost in 2023 |
|
West Virginia |
21% |
$11,089 |
|
Alaska |
18% |
$13,015 |
|
Delaware |
17% |
$11,091 |
|
Kentucky |
17% |
$9,463 |
|
Indiana |
17% |
$10,342 |
|
Utah |
11% |
$6,833 |
|
Nevada |
11% |
$7,198 |
|
|
