This Remote State Has the Most Affordable Health Insurance: See How Yours Stacks Up

Hawaii has the most affordable health insurance in the country, based on an Investopedia analysis of average premiums and deductibles for employer-provided plans. Oregon, Idaho, California, and North Dakota rounded out the top five. These states tend to have healthier populations, strong health care laws that protect consumers, and plenty of doctors and hospitals to choose from—all of which help keep costs down. 

Key Takeaways

• Hawaii has the most affordable health insurance in the country, followed by Oregon, Idaho, California, and North Dakota, Investopedia found.
• A state's laws, population makeup, cost of living, and network of health care providers directly impact its residents' health insurance costs. 
• You can find an affordable plan by understanding your state's landscape, comparison-shopping, assessing your needs, and applying for subsidized coverage. 

The Most Affordable States for Health Insurance

1. Hawaii

• Average Employee Premium: $1,060
• Average Family Deductible: $2,683
• Average Individual Deductible: $1,059

Credit the sunshine: Hawaii is known for its healthy populace, consistently receiving high marks in studies on public health. It also requires employers to provide coverage for almost all employees and caps employee contributions to premiums based on income. 

These consumer-friendly laws have proven instrumental in keeping health insurance costs low. Perhaps unsurprisingly, the Aloha State also has the lowest percentage (6.7%) among U.S. states of residents foregoing health care due to costs.

2. Oregon

• Average Employee Premium: $1,082
• Average Family Deductible: $3,322
• Average Individual Deductible: $1,776

In 2008, the Beaver State established the Oregon Health Leadership Council, an organization tasked with reducing increases in health care costs and premiums.

The state’s uninsured rate is also notably low, falling from 17.1% to 5.5% of its population between 2010 and 2023, per the United Health Foundation.

3. Idaho

• Average Employee Premium: $1,186
• Average Family Deductible: $3,229
• Average Individual Deductible: $1,816

Idaho boasts some of the lowest health insurance premiums in the country for people with job-based coverage. But that savings may come with a tradeoff. Idaho has fewer doctors than any other state: only 19 per 10,000 residents in 2019, compared to the national average of 28. 

4. California

• Average Employee Premium: $1,356
• Average Family Deductible: $3,167
• Average Single Payer Deductible: $1,490

In 2022, the Golden State launched the California Office of Health Care Affordability (OHCA), an agency tasked with slowing health care spending growth and improving system efficiencies.  

California is also one of five states (plus Washington, D.C.) to pass an individual mandate, requiring residents to have health insurance or pay a tax penalty. Its uninsured rate reached a record low of 6.4% in 2023, down from over 17% a decade prior.

5. North Dakota

• Average Employee Premium: $1,145
• Average Family Deductible: $3,634
• Average Single Payer Deductible: $1,922

North Dakota has a relatively high number of health care facilities and hospitals relative to its population. Its network includes 300 ambulatory care clinics, 52 hospitals, and 71 assisted-living facilities. Notably, North Dakota is among the more affordable states in which to give birth. 

Full Rankings

Here is how every state stacks up. We ranked each state’s affordability based on a composite of average annual premiums and deductibles for employer-provided plans. 

*Methodology: We ranked the states based on a composite score of each state’s employee premium, average family deductible, and average individual deductible. The source for the data is KFF.

What Makes a State Affordable for Health Insurance?

Health insurance plans require policyholders to shoulder the following expenses:

• Premium: The monthly price for your coverage
• Deductible: The amount you pay for health care before coverage begins
• Copay or coinsurance: The amount you contribute for most services, including doctors’ visits or prescriptions 

These costs vary by plan type, category, and structure. For instance, health maintenance organization (HMO) plans, which require you to seek non-emergency care within a provider network, typically tout lower out-of-pocket expenses and premiums than plans allowing more choice or flexibility.

Important

Health insurance plans must carry an out-of-pocket maximum—the most you’ll spend on health care in a year. Plans with low out-of-pocket maximums tend to have higher premiums and vice versa.   

Insurers also base prices on an applicant’s profile, considering age, family size, tobacco use, and location. To that end, the following factors directly impact health insurance affordability by state.  

Population Age and Health

The Affordable Care Act (ACA) requires insurers to group all ACA-compliant plans in a state into a single risk pool. This means if your state has many older or less healthy residents, your health insurance premiums may be higher than in states with younger, healthier populations.  

“The health of the risk pool is everything to an insurance policy,” said Jack Glasker, partner at Affordable Healthcare Solutions, a private brokerage in Westfield, New Jersey. 

Uninsured Rate

A large percentage of uninsured individuals in a state can contribute to higher health care prices as hospitals seek to recoup the costs associated with uncovered care. Those higher prices can ultimately translate to higher premiums, as can the smaller risk pools associated with underinsured populations.

Important

Health insurers cannot charge more based on gender or pre-existing conditions. 

Cost of Living

The cost of health care heavily influences the cost of health insurance. Hospitals and other medical providers can face inflated operational expenses in areas with comparatively high living costs, driving up the costs of claims and, subsequently, the price of insurance plans for residents.  

Market Competition

As a basic rule of economics, competition drives down prices. Fewer hospitals or the consolidation of local health care networks allow remaining providers to charge more for services, and can lead to higher health insurance premiums.

Similarly, if only a few insurance companies service your state, you’ll likely face higher plan prices. 

Implementation of Federal Policies

The ACA standardized many aspects of health care plans, including coverage for pre-existing conditions, prescription drugs, pregnancy, and emergency care. However, some parts of the federal law were overturned or left open to interpretation. 

For instance, the ACA allows states to expand Medicaid to most adults with incomes up to 138% of the federal poverty level, but only 41 states and Washington D.C., including the five on this list, have done so. 

Low-income residents may have difficulty finding an affordable plan in states that haven’t expanded Medicaid.

Local Health Care Laws

Some states have laws that go beyond what the ACA mandates. For instance, 12 states require expanded coverage for contraceptives without cost-sharing, meaning insurers can’t impose copays or deductibles.

“States that require insurance carriers to offer more robust coverage or perform more administrative tasks will inherently result in more costly plans,” said Ron E. Peck, chief legal officer of The Phia Group, LLC, a consulting firm focused on health care costs.

Conversely, some state-specific policies and resources can lower residents’ health care expenses. For instance, Hawaii’s long-standing Prepaid Health Care Act (PHCA), which establishes near-universal health insurance within the state, has led to improved health outcomes and more modest growth in health care expenditures. 

Choosing Health Coverage

Understanding your state’s policies and pricing patterns can inform your search for an affordable health care plan. However, “choosing a city to live [in] based on health insurance premiums is not a commonplace decision-making factor,” said Dr. Noor Ali, a health insurance consultant.

Fortunately, there are ways to secure affordable health insurance coverage, regardless of where you reside. 

• Opt for employer-sponsored coverage. These plans are generally cheaper than private insurance, as you split premium costs with your employer.
• Comparison-shop. If you don’t have access to a workplace plan, Healthcare.gov, the federal ACA marketplace, lets you compare plans side by side, providing clear pricing information and annual cost estimates. If your state runs its own insurance marketplace, you compare local plans there instead of Healthcare.gov. Employer-sponsored platforms also often offer decision-support tools.    
• Determine your assistance eligibility. Depending on your income, you may qualify for Medicaid. Alternatively, you may be eligible for premium tax credits or cost-sharing reductions for state or federal marketplace plans. Healthcare.gov or your state’s insurance marketplace can help you identify your options.     
• Check a plan’s network to see if it includes nearby or preferred doctors and facilities. In-network care generally costs less than out-of-network care. Plus, this step can help you determine if a lower-cost HMO plan will suffice over more expensive preferred provider organization (PPO) or exclusive provider organization (EPO) plans.   
• Check a plan’s formulary to verify that your recurring prescriptions are covered. Otherwise, you’ll have to pay in full for those medications.  
• Assess your health care needs. If you’re young, healthy, and require infrequent care, a high-deductible health plan may provide adequate emergency coverage at a more affordable price.  

The Bottom Line

Health insurance is complicated, and its costs are affected by many factors, some personal, some macroeconomic. Population makeup, market health, local laws, and implementation of federal policies largely influence state affordability. Across the U.S., you can up the odds of finding affordable health insurance by opting for employer-sponsored coverage, determining assistance eligibility, and comparison-shopping federal, state, or workplace markets. You should also consider your health care needs to find the right match. In general, the more a plan covers, the higher the cost. 

Source link