Recently, much scholarly work has been conducted examining the effect of rising income inequality on health outcomes. However, this work is somewhat inconclusive. Chiefly, the mechanisms which could produce such an association are still being sorted out. Further, much of this work is focused on mortality outcomes with little attention to how this process operates for actual health conditions, including chronic health problems, which are arguably now the main public health concerns of the developed world. In this study, in a series of multilevel binary logistic regression models using data from the 2005 and 2007 Behavioral Risk Factor Surveillance System (BRFSS), we examine the association between state-level income inequality, poverty, and social welfare measures on spending and policy to examine the association between these factors for three chronic health outcomes: diabetes, hypertension, and coronary heart disease. We find that income inequality is only conditionally positively related to the diagnosis of two of the three outcomes, diabetes and hypertension, and only in 2007. However, absolute poverty is related to the outcome across all three dependent variables. Additionally, certain social welfare measures attenuate the effects of both income inequality and absolute poverty, suggesting that certain welfare policies reduce this association.