Medical Expenditure Panel Survey Agency for Healthcare 

Research and Quality

STATISTICAL BRIEF #102 

October 2005

Highlights 

 Families without an elderly 

member were more than 

three times as likely not to 

have an out-of-pocket 

expense for prescription 

drugs (19.2 percent) than

families with an elderly 

member (5.4 percent) 

during 2002. 

 Families with an elderly 

member had prescribed 

drugs out-of-pocket 

expenses that accounted 

for greater than 5 percent 

of family income at a much

greater rate (30.8 percent) 

than families without an 

elderly member (6.8 

percent). 

 Families who spent greater 

than 5 percent of their 

income on out-of-pocket 

expenses for prescribed 

drugs were more likely to 

report an unmet need (15.4 

percent) than families who 

spent less than or equal to

5 percent of their income

(6.3 percent).

 The majority of families 

with an unmet need during 

2002 reported a financial 

cause as the sole or partial

reason for the problem 

(66.3 percent). 

Prescription Drugs: Out-of-Pocket 

Expenses and Unmet Need Relative to

Family Income, 2002 

Beth Levin Crimmel, MS and Marie N. Stagnitti, MPA 

Introduction 

This Statistical Brief discusses out-of-pocket expenses and unmet

need related to obtaining prescription drugs for the U.S. civilian 

noninstitutionalized (community) population in 2002. The analysis 

examines these topics relative to family income for families with outof-pocket expenses less than or equal to 5 percent of income and for 

those with expenses greater than 5 percent of income. Results are 

provided separately for families with an elderly member (a person 

age 65 or older) and for families without an elderly member. 

The data used to develop these estimates are derived from the 

Household Component of the Medical Expenditure Panel Survey 

(MEPS-HC) for 2002. Income and expense estimates are based on 

annual totals for 2002. All differences between estimates discussed 

in the text are statistically significant at the 0.05 level. 

Findings 

About 16 percent of all families did not have an out-of-pocket 

expense for prescription drugs in 2002 (figure 1.). Families without

an elderly member were more than three times as likely not to have 

an out-of-pocket expense (19.2 percent) than families with an elderly 

member (5.4 percent). Slightly more than one-fifth of all families 

included at least one elderly person. 

Nearly 9 of 10 families had out-of-pocket expenses less than or 

equal to 5 percent of income, including those with no expenses 

(figure 2). Overall, 11.9 percent of families reported having out-ofpocket prescription drug expenses totaling greater than 5 percent of 

income in 2002. However, families with an elderly member had outof-pocket expenses that accounted for greater than 5 percent of 

family income at a much greater rate (30.8 percent) than families 

without an elderly member (6.8 percent). 
In 2002, an unmet need for prescription drugs was a problem for 7.4 percent of families, either because a 

family member was unable to get the needed prescription or because a member experienced a delay in 

getting a prescription (figure 3). Families who spent greater than 5 percent of their income on out-ofpocket expenses for prescribed drugs were more likely to report an unmet need (15.4 percent) than 

families who spent less than or equal to 5 percent of their income (6.3 percent). Close to one-fourth (23.4 

percent) of families without an elderly member that spent greater than 5 percent of their income on out-ofpocket expenses for prescription drugs reported having an unmet need. This contrasts with only 9.0 

percent of families with an elderly member that had out-of-pocket expenses for prescribed drugs equaling 

greater than 5 percent of their income having an unmet need. For families spending less than or equal to 

5 percent of their income on out-of-pocket drug expenses, families without an elderly member were also 

more apt to have an unmet need (6.8 percent) than families with an elderly member (4.2 percent). 

The majority of families with an unmet need for prescription drugs during 2002 reported a financial cause 

as the sole or partial reason for the problem (66.3 percent) (figure 4). This was true for both families with 

an elderly member and those without an elderly member. (See Definitions section below for a list of 

financial causes.) 

Definitions 

For purposes of this analysis, families reporting annual income of less than or equal to zero dollars in 

2002—1.5 percent of all families—had their income reset to $100 for the year. This allowed for computing 

a meaningful estimate of the ratio of out-of-pocket prescription drug costs to income for those families. 

Also, about 1 percent of families did not provide information on whether they had any unmet need for 

prescription drugs in 2002. Therefore, estimates in this analysis on unmet need assume that those 

families with missing information had the same pattern regarding unmet need as families who did provide 

such information. 

Family 

A family in MEPS-HC generally consists of two or more persons living together in the same household 

who are related by blood, marriage, or adoption, as well as foster children. Other types of family units 

include unmarried persons living together who consider and report themselves a family unit and single 

persons living with neither a relative nor a person identified as a “significant other.” Relatives identified as 

usual residents of the household who were not present at the time of the interview, such as college 

students living away from their parents’ home during the school year, are considered as members of the 

family that identified them. All families with one or more members living in the civilian noninstitutionalized 

population for any part of the year are included in the estimates. 

– Family with an elderly member: A family in which at least one member was age 65 or older. There were 

25.9 million families with an elderly member in 2002, who made up 21.4 percent of all families. 

– Family without an elderly member: A family containing no person age 65 or older. There were 95.1 

million families without an elderly member in 2002, who made up 78.6 percent of all families. 

Family income 

Family income is the sum of the income of each person in the family. Each person’s income may include 

any of the following components: Annual earnings from wages, salaries, bonuses, tips, commissions; 

business and farm gains and losses; unemployment and workers’ compensation; interest and dividends; 

alimony, child support, and other private cash transfers; private pensions, IRA withdrawals, social 

security, and veterans’ payments; supplemental security income and cash welfare payments from public 

assistance, Temporary Assistance for Needy Families, and related programs; gains or losses from 

estates, trusts, partnerships, S corporations, rent, and royalties; and “other” income. Income excludes tax 

refunds and capital gains. 

Unmet need for prescription drugs 

In the last 12 months, at least one family member reported that he or she was unable to obtain 

prescription drugs or was delayed in obtaining prescription drugs that either the person or a doctor 

believed necessary. 
– Financial cause: At least one family member reported an unmet need for prescription drugs due to 1) 

not being able to afford care; 2) a health insurance plan that would not cover, approve, or pay for care; 

or 3) a physician who refused to accept the health insurance plan in which the family member was 

enrolled. 

– Other cause: No family member reported a financial cause for unmet need, but reported another reason 

for the unmet need, such as having a problem getting to the doctor’s office. 

About MEPS-HC 

MEPS-HC is a nationally representative longitudinal survey that collects detailed information on health 

care utilization and expenditures, health insurance, and health status, as well as a wide variety of social, 

demographic, and economic characteristics for the civilian noninstitutionalized population. It is 

cosponsored by the Agency for Healthcare Research and Quality and the National Center for Health 

Statistics. 

For more information about MEPS, call the MEPS information coordinator at AHRQ (301-427-1656) or 

visit the MEPS Web site at http://www.meps.ahrq.gov/. 

References 

For a detailed description of the MEPS survey design, sample design, and methods used to minimize 

sources of nonsampling error, see the following publications: 

Cohen, J. Design and Methods of the Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 1. AHCPR Pub. No. 97-0026. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Sample Design of the 1996 Medical Expenditure Panel Survey Household Component. MEPS 

Methodology Report No. 2. AHCPR Pub. No. 97-0027. Rockville, Md.: Agency for Health Care Policy and 

Research, 1997. 

Cohen, S. Design Strategies and Innovations in the Medical Expenditure Panel Survey. Medical Care,

July 2003: 41(7) Supplement: III-5–III-12. 

Suggested Citation 

Crimmel, B. L. and Stagnitti, M. N. Prescription Drugs: Out-of-Pocket Expenses and Unmet Need Relative 

to Family Income, 2002. Statistical Brief #102. October 2005. Agency for Healthcare Research and 

Quality, Rockville, MD. http://www.meps.ahrq.gov/papers/st102/stat102.pdf 

∗ ∗ ∗

AHRQ welcomes questions and comments from readers of this publication who are interested in 

obtaining more information about access, cost, use, financing, and quality of health care in the United 

States. We also invite you to tell us how you are using this Statistical Brief and other MEPS data and 

tools and to share suggestions on how MEPS products might be enhanced to further meet your needs. 

Please e-mail us at mepspd@ahrq.gov or send a letter to the address below: 

Steven B. Cohen, PhD 

Director 

Center for Financing, Access, and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road 

Rockville, MD 20850 
i i l i l i l 

0 

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Source: Center for F nanc ng, Access, and Cost Trends, AHRQ, Househo d Component of the Med ca Expend ture Pane Survey, 2002 

Figure 1. Percentage of families with no out-of-pocket prescription 

drugs expenses, by presence of elderly member, 2002 

5.4 

83.7 

94.6 

80.8 

16.3 19.2 

20 

40 

60 

80 

100 

All families Families with elderly 

member 

Families without elderly 

member 

No expense Has expense 

Note: Fam es w th e der y member are fam es that nc ude at east one person age 65 or o der. Fam es w thout e der y member are 

fam es that nc ude on y persons ess than age 65. Percent 

i i l i l i l 

0 

ili i l l ili i l l l ili i l l

ili i l l l

Source: Center for F nanc ng, Access, and Cost Trends, AHRQ, Househo d Component of the Med ca Expend ture Pane Survey, 2002 

Figure 2. Out-of-pocket prescription drugs expenses as percentage 

of family income, by presence of elderly member, 2002 

88.1 

69.2 

93.2 

11.9 

30.8 

6.8 

20 

40 

60 

80 

100 

All families Families with elderly 

member 

Families without elderly 

member 

Prescribed drugs expenses are greater than 5% of income 

Prescribed drugs expenses are less than or equal to 5% of income 

Note: Fam es w th e der y member are fam es that nc ude at east one person age 65 or o der. Fam es w thout e der y member are 

fam es that nc ude on y persons ess than age 65. Percent 
i i l i l i l 

0 

5 

ili i l l ili i l l l ili i l l

ili i l l l

Source: Center for F nanc ng, Access, and Cost Trends, AHRQ, Househo d Component of the Med ca Expend ture Pane Survey, 2002 

Figure 3. Percentage of families with an unmet need for 

prescription drugs, by presence of elderly member and out-of-pocket 

prescription drugs expenses as percentage of family income, 2002 

7.4 

5.7 

7.9 

6.3 

4.2 

6.8 

15.4 

9.0 

23.4 

10 

15 

20 

25 

All families Families with elderly 

member 

Families without elderly 

member 

Total 

Prescribed drugs expenses are less than or equal to 5% of income 

Prescribed drugs expenses are greater than 5% of income 

Percent 

Note: Fam es w th e der y member are fam es that nc ude at east one person age 65 or o der. Fam es w thout e der y member are 

fam es that nc ude on y persons ess than age 65. 

i i l i l i l 

0 

ili i l l ili i l l l ili i l l

ili i l l l

Source: Center for F nanc ng, Access, and Cost Trends, AHRQ, Househo d Component of the Med ca Expend ture Pane Survey, 2002 

Figure 4. Percentage of families with an unmet need for 

prescription drugs that had a financial cause, 

by presence of elderly member, 2002 

66.3 

58.4 

67.9 

20 

40 

60 

80 

All families Families with elderly 

member 

Families without elderly 

member 

Percent 

Note: Fam es w th e der y member are fam es that nc ude at east one person age 65 or o der. Fam es w thout e der y member are 

fam es that nc ude on y persons ess than age 65.