How Expensive is Healthcare in Hawaii Compared to Other States?
Healthcare costs are a significant concern no matter where you live, and Hawaii is no exception. As someone living on or considering moving to the islands, understanding how Hawaii’s healthcare expenses compare to other states is crucial, especially given the unique geographic and economic factors at play here. Let’s break down the key aspects of healthcare costs in Hawaii and how they stack up against the rest of the U.S.
1. Overall Healthcare Costs in Hawaii
When discussing healthcare in Hawaii, it’s important to remember that the state offers a unique blend of challenges and benefits due to its location. Healthcare in Hawaii is generally more expensive than in many other states, but it’s not as simple as “Hawaii is expensive.” The cost structure involves several factors, including high living expenses, isolation from mainland providers, and a robust healthcare system.
On average, Hawaii’s healthcare costs are slightly above the national average. According to data from the Health Care Cost Institute (HCCI), healthcare expenses per capita in Hawaii tend to be around 5% to 10% higher than the national average. However, Hawaii’s healthcare cost growth has been slower compared to some mainland states, meaning that while it’s expensive, the rise in costs isn’t as dramatic as it is in certain areas like California or New York.
2. Premiums and Insurance in Hawaii
Hawaii has some of the highest healthcare premiums in the country. However, it also has strong regulatory policies that mitigate the overall burden for many residents. Hawaii’s Prepaid Health Care Act, passed in 1974, requires employers to provide healthcare coverage to employees who work 20 or more hours per week, which is unique to the state. This law makes Hawaii the only state where employer-based insurance is virtually universal for full-time workers, which helps reduce the uninsured population significantly.
For workers, this means that while premiums may be high, most employees receive generous employer contributions to their health plans. The employer typically covers a minimum of 50% of premium costs, and often more. Compared to states without such mandates, this makes Hawaii an attractive place to live if you’re employed full-time.
In contrast, if you’re self-employed, work part-time, or unemployed, the costs can be steeper because you’ll need to secure your own health insurance through the state marketplace or a private provider. In these cases, premiums can reach $500 to $1,000 a month for a single person, depending on coverage levels, income, and whether you qualify for subsidies through the Affordable Care Act.
3. Out-of-Pocket Costs
Out-of-pocket costs such as copays, deductibles, and prescription medications are typically higher in Hawaii than in many other states. This is primarily due to Hawaii’s geographic isolation, which limits competition among healthcare providers and increases the cost of importing medical supplies and pharmaceuticals.
Hawaii residents, especially on the outer islands, may also need to travel to Oahu or even the mainland for certain specialized treatments, which adds additional costs like airfare and lodging to their healthcare expenses. That said, the state is continuously investing in telemedicine and increasing access to specialized care on more islands, which helps reduce these expenses for some residents.
I’ve personally had to fly to Honolulu many times to see specialists that are not available on the Big Island. That’s something to keep in mind if you’re thinking about relocating to Hawaii. If you have any type of special care that you need, it’s best to set yourself up with care prior to moving here. One of the specialists we needed to see worked 2 days a week at a different island every week. As a result the waiting time was 6 months prior to seeing them. So although we have care, it’s not as convenient & fast as it is on the mainland.
4. Prescription Drug Costs
Prescription drug prices in Hawaii are higher than in many mainland states but not significantly, driven largely by the state’s geographic isolation. Shipping pharmaceuticals to Hawaii from mainland suppliers increases costs, which are then passed down to consumers. Additionally, limited competition among local pharmacies can keep prices elevated.
Compared to states where large pharmacy chains and competitive pricing keep costs lower, Hawaii’s prescription drug prices can be burdensome, particularly for those requiring ongoing medication. However, many residents have good insurance coverage for prescriptions through their employer or state health programs, which can help mitigate these costs.
5. Medical Services and Hospital Costs
Hawaii’s hospital costs tend to be higher than in many mainland states, though they are relatively in line with other high-cost areas like California or New York. For example, hospital visits, emergency room services, and specialized surgeries can be more expensive, particularly on islands with fewer hospitals and medical centers, such as Maui or the Big Island.
One reason for this is the lack of competition. Hawaii’s smaller population means fewer hospitals and healthcare providers, which can drive up prices due to limited availability. Hospitals also bear the additional costs of importing equipment, medicine, and even certain personnel, all of which increase the overall price of medical services.
However, Hawaii also boasts some of the best health outcomes in the nation, which can, in part, justify the higher costs. The state consistently ranks as one of the healthiest states in terms of life expectancy, chronic disease rates, and overall well-being. Investing in health here often translates to longer, healthier lives for residents.
I think that has a lot to do with the Hawaii lifestyle. The lifestyle here is conducive to being outdoor all the time, whether it’s by the beach, in your garden, or socializing is typically activity-related and outdoors. The other reason I believe Hawaii is the happiest and healthiest state is stress. Living a stress-free like here is quite easy. Although it can be aggravating at first to be “on-island time,” eventually it grows on you. And it makes you realize those deadlines are arbitrary for the most part. Don’t get me wrong, it doesn’t apply to everything: if I want to see an optometrist, I’d like them to be there & on time. But for the most part, it’s a way to let go of unnecessary stressors.
The other reason I believe the Hawaii population is so healthy is food. A lot of locals eat a variety of fruits and vegetables, and typically eat locally sourced groceries. For example, I purchase local poultry, beef, and locally grown vegetables. The prices are similar to imported ones and I like the idea that I’m supporting local businesses.
6. Medicaid and Medicare in Hawaii
Hawaii’s Medicaid and Medicare programs provide substantial coverage for eligible residents, especially the elderly, low-income individuals, and those with disabilities. These federal-state programs offer benefits that help alleviate the financial burden of healthcare, particularly given Hawaii’s higher cost of living.
Hawaii’s Medicaid program, Med-QUEST, is widely regarded as a well-managed system, offering comprehensive coverage for low-income individuals and families. Compared to many other states, Hawaii has a high rate of Medicaid participation, which helps keep healthcare costs more manageable for a significant portion of the population.
Medicare recipients in Hawaii also enjoy fairly comprehensive coverage, though out-of-pocket costs for prescription drugs and specialized care can still be high. Supplemental insurance plans are often necessary to cover these gaps, and the cost of those supplements can be higher in Hawaii than on the mainland.
7. Cost of Healthcare Compared to Other States
While healthcare in Hawaii is more expensive, it’s important to note that it’s not the most expensive in the U.S. States like California, New York, and Alaska often top the charts for healthcare costs, particularly when it comes to insurance premiums and out-of-pocket expenses. Hawaii falls into a middle-to-high tier in terms of overall costs, with some unique pros and cons.
One of the key advantages of Hawaii’s healthcare system is its employer-based insurance mandate, which significantly lowers the uninsured rate and offers substantial employer contributions to premiums. This makes healthcare more affordable for full-time workers compared to states with fewer employer insurance mandates.
On the other hand, Hawaii’s isolated location leads to higher prescription drug prices, fewer hospital and specialist options, and additional travel costs for medical care, especially for those living on outer islands.
On the Big Island we have quite a few hospitals: Kona Community Hospital, Waimea Hospital, Kau Hospital, and Hilo Hospital. We also have a lot urgent care centers throughout the Big Island. These centers are amazing for small wounds and if you need to see a doctor in a pinch. The other thing that drives the cost higher in Hawaii is how many times people get airlifted from desolate areas for care, or if they need immediate help from specialists unavailable locally. This happened to one of my tennis friends who has a heart attack on the tennis courts and a helicopter landed in the fields & flew him straight to Queens Medical Center. There he saw a cardiovascular specialist, had the surgery he needed, and he’s back on the courts now! Luckily this was all covered by his medical provider and the helicopter ride only cost him $25. But once you move here, you’ll see that this helicopter ride story is surprisingly common.
Conclusion: Is Healthcare in Hawaii Worth the Cost?
While healthcare in Hawaii is undeniably expensive, it is balanced by high-quality care, robust insurance coverage for full-time employees, and some of the best health outcomes in the country. Compared to other high-cost states, Hawaii offers a unique blend of healthcare advantages, including the Prepaid Health Care Act and strong Medicaid and Medicare programs.
However, for part-time workers, self-employed individuals, and those without employer-sponsored insurance, the cost of healthcare can be a significant financial burden. It’s essential to factor in these costs when considering a move to Hawaii or when planning long-term residency on the islands.
Ultimately, healthcare in Hawaii may come with a higher price tag, but for many, the benefits of island living and access to comprehensive healthcare make it worth the investment. Understanding the healthcare landscape will help you make informed decisions about your health and finances whether you’re considering Hawaii as a permanent home or a temporary residence.
Need more insights on managing healthcare costs in Hawaii? Contact Me to discuss your health insurance and real estate options.