The ballooning cost of healthcare in Alaska.

AuthorChepurko, Iuliia
PositionALASKA TRENDS

A challenging dichotomy exists in Alaska: the healthcare industry is one of the state's largest employers, but at the same time, healthcare is one of the largest expenses for many people.

In 2009, residents of the Last Frontier spent 19.1 percent of their income on medical bills, more than the residents of forty other states. The highest share of income spent on healthcare was West Virginia at 24.4 percent, followed by Maine with 23.3 percent and Mississippi with 21.8 percent (see Figure 1).

Since 2009, the most recent year for which state-by-state data is available, the situation has likely worsened after taking into account the inflation rate in healthcare spending. Prices for healthcare services on average grow 2.4 times faster than prices of consumer goods. From 2002 to 2009, healthcare inflation was 6.8 percent per year, while general inflation was 2.8 percent.

These numbers are lower at the national level, but there is a tendency for healthcare costs to increase faster than general prices. Following the declining inflation rate in Alaska the past five years, there may be a decrease in inflation for healthcare as well.

The Organisation for Economic Co-operation and Development tracks information on healthcare expenses in different countries on an...

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