California Health Care Spending
For the first time since 2012, the federal government has released health spending data by state. The data, available for 1991-2014, cover personal health care, which includes goods and services, such as hospital care, physician and drugs, but excludes administration, public health activities, and investment.
Health spending per capita in California ($7,549) was lower than the US average ($8,045), and ranked 15th among all states in 2014 (the state with rank of 1 is least expensive). From 2009 to 2014, spending growth averaged 4.9% per year in total and 4.0% per capita. This was faster than average US spending growth (3.9% total health spending, 3.1% per capita) during the same period. It also exceeded California’s average annual five-year growth in GDP (4.2%), CPI (1.9%), and median wages (1.0%).
Use the interactive charts below to see more details.
Overall per capita spending for California was about $500 per person lower than the US average. Medicaid spending differences per enrollee were the most dramatic, with annual California spending per enrollee nearly $1,500 (21%) less than the US. In contrast, California Medicare and private health insurance spending per enrollee were both higher than the US average ($847, or 8% higher, for Medicare; $184, or 4% higher, for private health insurance).
The gap between California’s and the nation’s spending per capita shrank from $642 in 2004 to $496 in 2014.
Overall health spending per capita in California grew at an average annual pace of 4.0% over the five-year period from 2009 to 2014, almost a full percentage point faster than the US. The period was influenced by historically low growth in health spending nationwide during and after the recession. California’s state ranking on per capita spending dropped from 8th in 2004 to 15th in 2014, as it became relatively more expensive.
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The charts above show growth rates for total and per capita spending by time period, and include detail for the major payers. Over the most recent five-year period (2009-2014), overall spending per capita increased 4.0%, while growth per enrollee was 4.6% for private health insurance, 3.4% for Medicaid and 1.5% for Medicare. In the aggregate, Medicaid’s total dollar spending has grown much faster — on average 9.6% per year over 2009-2014 — than its per enrollee spending. Increases in the number of people covered have held down per enrollee growth. Most dramatically, in 2014, with Medicaid expansion under the Affordable Care Act (ACA), millions of healthier enrollees gained coverage, lowering per enrollee spending by 9.2%.
The historical gap between California and US per enrollee Medicaid spending has been narrowing. As California has become more expensive, its ranking among states fell from first to fifth lowest.
Overall, hospital care accounts for the largest share of health care spending. For additional details on categories, see the data file. A quick reference guide is also available for download below. These materials are part of CHCF’s California Health Care Almanac, an online clearinghouse for key data and analyses describing the state’s health care landscape. See our entire collection of current and past editions of Health Care Costs 101.
Background and data: Data source is the Centers for Medicare & Medicaid Services (CMS), National Health Expenditure Data, Health Expenditures by State of Residence, 1991-2014. These data represent personal health care spending, which excludes public health activities, administration, and investment. The figures capture spending from both private (such as households and business) and government sources. The data include a breakdown on spending for the three largest payers: private health insurance, Medicaid (Medi-Cal in California), and Medicare. Overall spending is expressed in aggregate dollars and per capita or per enrollee. Prescription drug spending, when reported at the state level, includes other nondurable medical products (e.g., retail over-the-counter medication and medical sundries).