Health Care Expenses: Poor, Near Poor, and Low income People in the United States Civilian 

Noninstitutionalized Population, 2002 

Diana Wobus and Gary Olin 

July 2005 

ABSTRACT

This report provides estimates of health care expenditures for poor, near poor, and low income

people in the United States; i.e., people whose income is less than 200 percent of the Federal 

Poverty Line. It highlights the characteristics of poor or near poor and low income persons and 

their expenditures for health care. The estimates are from the 2002 Medical Expenditure Panel 

Survey (MEPS) and cover the U.S. civilian noninstitutionalized population. While providing an 

overview of total health care expenses for the population, the report focuses on estimates of 

expenses for hospital services, office-based medical provider services, and prescription

medicines. Detailed comparisons are made by type of service, source of payment, and selected 

demographic characteristics of the population. All differences between estimates discussed in 

the text are statistically significant at the 0.05 level. 

Diana Wobus, Ph.D. 

Westat

1650 Research Blvd. 

Rockville, MD 20850 

WOBUSD@Westat.com 

Gary Olin, Ph.D. 

Center for Financing, Access, and Cost Trends 

Agency for Healthcare Research and Quality 

540 Gaither Road 

Rockville, MD 20850 

E-mail: golin@ahrq.gov 

2
Introduction

This report uses the 2002 Medical Expenditure Panel Survey (MEPS) to provide 

estimates of health care expenditures for the United States civilian noninstitutionalized 

population stratified by income level and selected demographic characteristics. The population 

is divided into three income groups according to the Federal Poverty Line (FPL): the poor or 

near poor (at or below 125 percent of FPL), the low income (125 percent to 200 percent of FPL), 

and the middle or high income (above 200 percent of FPL). The primary focus is on 

comparisons of hospital services, office-based medical provider services, and prescription 

medicines received by the poor or near poor and the low income. 

Expenditures for these services, which are defined as direct payments for health services 

and care received during the year, include out-of-pocket payments by individuals and payments 

by private insurance, Medicare, Medicaid, and other sources. Hospital expenses include both 

facility charges and physician fees. Ambulatory care (outpatient, emergency room, or officebased services) includes expenses for physician and non-physician services. Payments for overthe-counter drugs are not included in the estimates. All mean and median expenses are estimated 

at the person level for persons with expenses. All differences between estimates discussed in the 

text are statistically significant at the 0.05 level. 

Table 1 of the report shows the distribution of the U.S. civilian noninstitutionalized 

population by income group and selected demographic characteristics. Tables 2-4 contain 

estimates of health care use and expenditures by income group and type of service. These tables 

show that use and expenditures by the poor or near poor and low income groups are often 

substantially different from those for the middle or high income group. For that reason, tables 5-

3
7 highlight the characteristics of the combined population of poor, near poor, and low income

persons and their health care expenditures. 

Selected Population Characteristics

Table 1 shows the distribution of the population by income and selected demographic 

characteristics. Of the 288 million civilian noninstitutionalized people in 2002, over 88 million 

were poor or near poor (48 million) or low income (40 million). People characterized as poor, 

near poor, or low income constituted 30.6 percent of the total population. In comparison to the 

middle or high income group, the poor or near poor and low income groups had higher 

representations of children and elderly, females, racial and ethnic minorities, uninsured and 

public-only insured persons, and persons in poor or fair health. 

Children under 6 represented 8.1 percent of the population, but the poor or near poor and 

the low income groups had higher proportions of children in this age group (12.5 percent and 9.6 

percent). Children age 6 to 17 represented 17.2 percent of the population but had higher 

representation in the poor or near group (21.8 percent) and the low income group (19.5 percent). 

At the upper end of the age continuum, the elderly (age 65 and over) represented 12.6 percent of 

the population, but had higher representation in the low income group (18.5 percent). 

Females representing 51.1 percent of the total population had higher representation in the 

poor or near poor (55.5 percent) and low income (53.9 percent) groups. Hispanics (of any race) 

represented 13.8 percent of the total population, but had higher representation in the poor or near 

(24.5 percent) and the low income (22.0 percent) groups. Blacks, single race, also had higher 

representation in the poor or near poor (22.2 percent) and the low income (15.2 percent) groups 

than they did in the total population (12.1 percent). 

4
Nearly three quarters of the non-elderly population had private insurance (72.9 percent) 

for all or part of the year, with the rest split between uninsured all year (13.4 percent) or publiconly insurance for all or part of the year (13.8 percent). Compared to all non-elderly persons, the 

poor or near poor and low income groups had high proportions of people with public-only 

insurance (49.8 percent and 22.7 percent) and uninsured people (24.2 percent and 24.9 percent). 

Medicare beneficiaries in the 65 and over age group included 29.2 percent with Medicare 

only, 59.9 percent with supplemental private insurance, and 10.9 percent with other public 

insurance. Medicare only coverage was more common among people in the poor or near poor 

and low income groups (33.8 percent and 33.7 percent) than it was among people in the middle 

or high income group (26.5 percent). In addition, compared to the middle or high income group, 

the poor or near poor and low income groups had higher proportions of beneficiaries with other 

public insurance and lower proportions with supplemental private insurance. 

 Self-reported health status also varied by income group. Overall, 10.8 percent of the 

population reported being in poor or fair health, but the percentage was higher in the poor or near 

poor and low income groups (19.7 percent and 14.9 percent). 

 

Total Health Care Expenses 

Table 2 shows, by age and income group, health care expenditures for all types of health 

care, including hospital services, office-based services, home health care, dental services, 

prescription medicines, and medical supplies, and the distribution of payments by source. In 

2002, 85.2 percent of the total population had health care expenses. This group spent $810.7 

billion on health care, with a median expense of $960 and a mean expense of $3,302 per person 

5
with an expense. Median expenses were substantially lower than mean expenses because a small 

proportion of the population had a large proportion of the total expenses. 

The proportion of persons with an expense was larger in the middle or high income group 

(87.8 percent) than it was in the other two income groups (78.9 percent for the poor or near poor 

and 79.5 percent for the low income group). However, variation in the proportion of persons 

with an expense was confined to the income groups containing people under the age of 65. The 

proportion of persons age 65 and over with an expense was the same in each of the three income

groups (approximately 96 percent). 

Table 2 also shows the percent of expenses paid by source. In the aggregate, 19.1 percent 

of all health care expenses were paid out of pocket, 39.7 percent by private insurance, 22.0 

percent by Medicare, 10.8 by Medicaid, and 8.3 percent by other sources. Within the 0-64 yearold age group, the poor or near poor and low income groups paid relatively less out of pocket 

(14.4 percent and 15.7 percent) compared to the middle or high income group (22.5 percent). 

Medicaid paid the largest share of expenses for poor or near poor persons (43.4 percent), while 

private insurance paid the largest share for middle or high income persons (62.7 percent). 

Within the 65 and older age group, Medicare paid the largest share of expenses regardless 

of income (54.9 to 57.7 percent of total expenses), but other payment shares varied by income

group and source. Low income people paid about the same share out of pocket (13.2 percent) as 

Medicaid paid for them (12.7 percent). Middle or high income people paid about the same share 

out of pocket (17.7 percent) as private insurance paid for them (19.0 percent). 

6
Core Service Use by Type of Service and Income 

Table 3 shows the proportion of people with expenses for hospital inpatient, outpatient, 

or emergency room services, office-based medical provider services, and prescription medicines. 

These services accounted for approximately 85 percent of all health expenditures in 2002, but the 

proportion of people with an expense varied by income group and type of care. The poor or near 

poor and low income groups had a higher proportion of people with hospital inpatient expenses 

(10.2 percent and 9.3 percent) than the middle or high income group (6.5 percent), and a higher 

proportion of the poor or near poor group (18.5 percent) and the low income group (15.8 percent) 

had emergency room expenses compared to the middle or high income group (11.7 percent). 

However, the proportion of the poor or near poor group (65.7 percent) and the low 

income group (66.9 percent) with office-based doctor expenses was less than that of the middle 

or high income group (74.9 percent). Similarly, the proportion with prescription medicine 

expenses was lower in the poor or near poor group (59.0 percent) and the low income group 

(60.2 percent) than it was in the middle or high income group (66.5 percent). The poor or near 

poor group also was less likely than the middle or high income group to have expenses for 

hospital outpatient services (14.4 percent versus 17.3 percent). 

 

Core Service Expenses by Type of Service and Income 

Table 4 shows, by income group, expenses for inpatient hospital services, ambulatory 

care services, and prescribed medicines. Median and mean expenses for persons with outpatient 

and emergency room expenses varied by income group. For outpatient services, the low income

group had a lower mean expense per person with an expense ($1,345) than the poor or near poor 

($1,647) and the middle or high income ($1,697) groups, while the middle or high income group 

7
had higher median expense per person with an expense ($639) than the poor or near poor ($467) 

and the low income ($451) groups. For emergency room services, the mean expense per person 

with an expense was higher for the middle or high income group ($787) than for the poor or near 

poor ($582) and the low income ($686) groups. The median expense per person with an expense 

was also substantially higher for the middle or high income group ($426) than that for the poor 

or near poor ($278) and the low income ($340) groups. 

Expenses for people with office-based provider services and prescription medicines also 

varied across the income groups. The median expense per person with an expense for officebased health care was higher for the middle or high income group ($308) than for the other two 

income groups ($275 for the poor or near poor group and $287 for the low income group). For 

persons with prescription medicine expenses, the middle or high income group had lower mean 

expense ($755) than both the poor or near poor ($980) and the low income ($928) groups. 

 A Closer Look at the Poor, Near Poor and Low Income 

Tables 2 to 4 provide estimates of health care use and expenses by income group. The 

estimates for the poor or near poor and low income groups are often substantially different from

those for the middle or high income group. Although insurance coverage can vary substantially 

between the poor or near poor and the low income groups, the remainder of this report focuses 

on health expenditures for the combined population of poor, near poor, and low income people 

stratified by selected demographic characteristics. 

8
Hospital Inpatient Expenses 

Nearly 10 percent of the poor, near poor and low income people had hospital inpatient 

expenses in 2002 (Table 5). The total inpatient expense for this group was $104.1 billion, and 

the median and mean were $5,616 and $12,066 for persons with expenses. Among adults, a 

higher proportion of elderly people age 65 and over (22.3 percent) had inpatient expenses than 

did 45-64 year-olds (12.8 percent) or 18-44 year-olds (8.9 percent). Median inpatient expenses 

per person with an expense were higher for the elderly ($7,848) and 45-64 year-olds ($6,369) 

than for 18-44 year-olds ($4,359). Mean expenses per person with an expense also were higher 

for the elderly ($14,797) and 45-64 year-olds ($15,361) than for 18-44 year-olds ($7,935). 

A higher proportion of females (11.7 percent) had inpatient expenses than males (7.5 

percent). However, among people with expenses, median and mean expenses were higher for 

males ($6,873 and $14,599) than for females ($5,226 and $10,731). 

Hispanics (of any race) were less likely to have inpatient expenses than non-Hispanics 

(6.2 percent versus 10.9 percent). Median and mean expenses per person with an expense were 

lower for Hispanics ($4,172 and $9,014) than for non-Hispanics ($5,912 and $12,593). Whites, 

single race, were more likely than Blacks, single race, to have inpatient expenses (11.9 percent 

versus 9.7 percent). Whites, single race, also had higher mean expenses per person with an 

expense than Blacks, single race ($13,429 versus $10,604). 

Among people under age 65, the public-only insurance group (primarily Medicaid) was 

most likely to have inpatient expenses (10.5 percent), followed by the privately insured (7.1 

percent) and the uninsured (3.3 percent). The median expense per person with expenses was 

lower for the uninsured ($2,789) than for the privately insured ($5,164) and the publicly insured 

9
($4,426), but the mean expense per person with expenses was the same for all three insurance 

categories. 

People in excellent health were least likely to have inpatient expenses (3.7 percent), while 

those in poor health were most likely (35.0 percent). Median and mean expenses per person with 

an expense also were higher for those in poor health than for those in excellent or very good 

health. 

Ambulatory Care Expenses 

Over 70 percent of the poor, near poor, and low income people had ambulatory care 

expenses, totaling more than $81 billion with a median expense of $387 and a mean expense of 

$1,311 for persons with expenses (Table 6). Among adults age 18 and over, 91.2 percent of the 

elderly had ambulatory care expenses, followed by 77.0 percent of the 45-64 year-olds and 60.9 

percent of the 18-44 year-olds. Among children, the 0-5 year-olds were more likely to have 

ambulatory care expenses (79.2 percent) than the 6-17 year-olds (61.0 percent). 

The mean expense per person with an expense was highest for the elderly ($2,170), 

followed by 45-64 year-old adults ($1,947) and 18-44 year-old adults ($1,179). Children had the 

lowest mean expense ($526 to $529). 

Females were more likely to have ambulatory care expenses (77.0 percent) than males 

(61.9 percent). The median expense per person with an expense also was higher for females 

($427) than for males ($324). 

Hispanics (of any race) were less likely to have ambulatory care expenses than nonHispanics (58.5 percent versus 73.7 percent). Median and mean expenses per person with an 

expense also were lower for Hispanics ($238 and $969) than they were for non-Hispanics ($437 

10
and $1,394). Among non-Hispanics, Whites, single race, had the highest proportion of people 

with expenses (78.0 percent) and Asians, single race, had the lowest proportion (56.4 percent). 

Whites, single race, and Other Races had higher median expenses per person with an expense 

($515 and $401) compared to Blacks, single race, and Asians, single race ($296 and $261). 

For people under 65, the uninsured were less likely to have ambulatory care expenses 

(43.0 percent) than the publicly insured (75.1 percent) and the privately insured (72.6 percent). 

In addition, uninsured people with expenses had lower median and mean expenses compared to 

both publicly and privately insured people. 

People in poor health were mostly like to have ambulatory care expense (94.1 percent), 

while those in excellent health were least likely (61.6 percent). Median and mean expenses per 

person with an expense also were highest for those in poor health ($1,309 and $3,172) and 

lowest for those in excellent health ($221 and $591). 

Prescription Medicine Expenses

Prescription medicine expenses for poor, near poor, and low income people were more 

than $50 billion in 2002, with a a median expense of $265 and a mean expense of $956 per 

person with an expense (Table 7). The elderly were most likely to have prescription medicine 

expenses (89.5 percent), while 6-17 year-old children were least likely (43.0 percent). The 

median expense for the elderly ($1,131) was higher than that for 45-64 year-olds ($752), and the 

mean expense for persons with expenses was highest for 45-64 year-olds ($1,584) and the 

elderly ($1,697). 

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Females were more likely than males to have prescription medicine expenses (67.0 

percent versus 50.5 percent). In addition, the median expense per person with an expense was 

higher for females ($316) than for males ($203). 

Hispanics (of any race) were less likely than non-Hispanics to have prescription medicine 

expenses (42.5 percent versus 63.9 percent). The median and mean expenses per person with an 

expense were higher for non-Hispanics ($332 and $1,037) than for Hispanics ($96 and $583). 

Whites, single race, were most likely to have prescription medicine expenses (70.0 percent), 

while Hispanics and Asians, single race, were least likely (45.2 percent and 40.6 percent). 

Median and mean expenses per person with an expense were highest for Whites, single race 

($390 and $1,104) and lowest for Asians, single race ($94 and $428). 

The proportion of people under the age of 65 with prescription medicine expenses was 

higher for the privately insured (60.8 percent) and the publicly insured (58.6 percent) than for the 

uninsured (36.4 percent). The mean expense per person with an expense was higher among 

those with public insurance ($963) than for the privately insured ($583) or the uninsured ($525). 

Elderly Medicare beneficiaries with other public insurance also had high mean and median 

expenses per person with an expense compared to other elderly Medicare beneficiaries. 

Prescription drug expenditures tracked inpatient and ambulatory care expenditures by 

health status. Those in poor health were mostly like to have a prescription expense (91.6 

percent) and those in excellent health were least likely (44.1 percent). Median and mean 

prescription medicine expenditures also were notably higher for people in poor health ($1,958 

and $2,661) than they were for people in excellent health ($81 and $313). 

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Summary 

In 2002, nearly 31 percent of the U.S. civilian noninstitutionalized population was poor, 

near poor, or low income. This group included 44 million people with an income below 125 

percent of Federal poverty threshold (the poor and near poor) and another 40 million people with 

an income at 125 to 200 percent of Federal poverty threshold (the low income). Compared to the 

middle or high income population, the poor or near poor and low income groups had larger 

proportions of children, women, Hispanics (of any race) and Blacks (single race), uninsured 

people, and people in fair or poor health. 

Poor or near poor and low income people were more likely to have hospital inpatient and 

emergency room expenses than middle or high income people. They were less likely to have 

hospital outpatient and office-based doctor expenses and prescription medicine expenses. In 

addition, expenditures per person with an expense tended to vary by income. Comparisons of 

total health care expenditures among people under age 65, for example, showed that the poor or 

near poor had a lower median expense per person with an expense and a higher mean expense 

per person with an expense than those in the middle or high income group. 

Health care expenditures also varied within the combined population of poor, near poor, 

and low income people. Non-Hispanics (as a group) always had higher mean and median 

expenses per person with an expense than Hispanics had for hospital and ambulatory care 

services and prescription medicines. In the non-Hispanic group, Whites, single race, had higher 

mean inpatient expenses per person with an expense than Blacks, single race. In addition, 

differences in median and mean expenses per person with an expense were observed within the 

poor, near poor, and low income population when it was stratified by characteristics such as 

gender, health insurance status, or health status. 

13
References

Cohen J. Design and methods of the Medical Expenditure Panel Survey Household Component. 

Rockville (MD):Agency for Health Care Policy and Research; 1997. MEPS Methodology Report 

No. 1. AHCPR Pub. No. 97-0026. 

Cohen SB. Sample design of the 1997 Medical Expenditure Panel Survey Household 

Component. Rockville (MD):Agency for Healthcare Research and Quality; 2000. MEPS 

Methodology Report No. 11. AHRQ Pub. No. 01-0001. 

Cohen SB. Design strategies and innovations in the Medical Expenditure Panel Survey. Medical 

Care 2003; 41(7):5-12. 

Ezzati-Rice, T. M., et al. (2004). Health care expenses in the United States, 2000. Research 

Findings #21. Rockville (MD): Agency for Healthcare Research and Quality. 

Selden TM, Levit KR, Cohen JW, et al. Reconciling medical expenditure estimates from the 

Medical Expenditure Panel Survey and the NHA, 1996. Health Care Financing Review 2001 

Fall; 23(1):161-78. 

Zuvekas SH, Cohen JW. A guide to comparing health care expenditures in the 1996 MEPS to the 

1987 NMES. Inquiry 2002 Spring; 39(1):76-86. 

14
Table 1. Distribution of the civilian community population by selected 

demographic characteristics and income: United States, 2002 

 Percent of population by incomea 

Poor or Low Middle or high 

Population characteristics All incomes near poor income income 

Total population (in thousands) 288,182 48,086 40,170 199,926 

 

 Population as a Percentage of Column Total 

Age 

 5 and under 8.1 12.5 9.6 6.7 

 6 to 17 17.2 21.8 19.5 15.6 

 18 to 44 38.6 36.8 37.1 39.3 

 45 to 64 23.6 15.8 15.3 27.1 

 65 and over 12.6 13.1 18.5 11.3 

Gender 

 Male 48.9 44.5 46.1 50.5 

 Female 51.1 55.5 53.9 49.5 

Race/ethnicity 

 Hispanic or Latino (any race) 13.8 24.5 22.0 9.5 

 Non-Hispanic or Latino 86.2 75.5 78.0 90.5 

 White, single race 67.8 47.4 56.1 75.1 

 Black, single race 12.1 22.2 15.2 9.1 

 Asian, single race 4.0 2.5 3.8 4.4 

 Other single/multiple races 2.3 3.3 3.1 1.9 

Health insurance statusb

 

Under 65

 Any private 72.9 26.0 52.4 87.7 

 Public only 13.8 49.8 22.7 3.7 

 Uninsured 13.4 24.2 24.9 8.7 

65 and over

 Medicare only 29.2 33.8 33.7 26.5 

 Medicare and private 59.9 39.6 52.0 68.2 

 Medicare and other public 10.9 26.6 14.3 5.3 

Health Statusc

 

 Excellent 30.9 24.2 24.7 33.8 

 Very Good 33.1 25.8 30.6 35.3 

 Good 25.2 30.3 29.8 23.1 

 Fair 7.8 13.7 10.8 5.8 

 Poor 3.0 6.0 4.1 2.0 

a Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. b

 Uninsured refers to persons uninsured for the entire year. Public and private health insurance categories refer to individuals with 

public or private insurance at any time during the period; individuals with both public and private insurance and those with TRICARE 

(Armed Forces-related coverage) are classified as having private insurance. Counts may not add up to the total population because 

data on this variable were not available for some sampled persons. c

 Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

15
Table 2. Total health care expendituresa and median and mean expenditures per person with e

income and source of payment: United States, 2002 

Distribution of expenses

Percent Total for persons with an expensec Percent distribution of expen

Persons with an expenses Out of Private

Age and incomeb (in thous) expense (in millions) Median Mean Pocket insuranced Medicare 

All ages 288,182 85.2 810,724 960 3,302 19.1 39.7 22.0  Poor or near poor 48,086 78.9 144,314 804 3,802 14.0 13.7 29.4  Low income 40,170 79.5 123,397 845 3,863 16.7 27.0 30.5  Middle or high income 199,926 87.8 543,013 1,004 3,092 21.1 49.6 18.2 0 to 64 Poor or near poor 41,771 76.4 91,857 565 2,879 14.4 17.0 13.2  Low income 32,743 75.9 66,905 530 2,691 15.7 40.6 8.6  Middle or high income 177,412 86.7 379,696 838 2,469 22.5 62.7 2.4 65 and over  Poor or near poor 6,315 95.8 52,456 3,824 8,666 13.2 8.0 57.7  Low income 7,427 95.4 56,493 3,697 7,973 17.9 10.8 56.5  Middle or high income 22,514 96.8 163,317 3,389 7,498 17.7 19.0 54.9 

a Total includes expenditures for hospital services, office-based provider services, home health care, dental services, prescription medicines, and medicab Poor or Near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with income from 125 perc

of the poverty line; middle or high income—persons in families with income at or over 200 percent of the poverty line.

c All expense distribution, including means and medians, are based on persons with an expense. d Private insurance includes TRICARE (Armed Forces-related coverage).

e Other includes payments from the Department of Veterans Affairs (except TRICARE); other Federal sources (Indian Health Service, military treatment f

provided by the Federal Government); various state and local sources (community and neighborhood clinics, state and local health departments, and Sta

Medicaid); Worker’s Compensation; various unclassified sources (e.g., automobile, homeowner’s, or other liability insurance, and other miscellaneous or 

payments reported for persons who were not reported as enrolled in the Medicaid program at any time during the year; and private insurance payments r

any reported private health insurance coverage during the year. Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare  Research and Quality: Medical Expenditure Panel Survey, 2002. 

16
Table 3. Distribution of people with health care expenditures for core servicesa

by type of service and income: United States, 2002 

 Income groupsb

 

All incomes Poor or Low Middle or 

Type of service near poor income high income

Total population (in thousands) 288,182 48,086 40,170 199,926 

 

People with expenses as a percentage of column total 

 

Inpatient hospital staysc 7.5 10.2 9.3 6.5 

 

Ambulatory cared

 70.8 69.9 70.5 76.9 

 Outpatient visits 16.7 14.4 16.1 17.3 

 Emergency room visitse 13.4 18.5 15.8 11.7 

 Office-based doctor visitsf 72.2 65.7 66.9 74.9 

 

Prescription medicines 64.4 59.0 60.2 66.5

 

a Core services include hospital services, office-based provider services, and prescription medicines. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Inpatient stays include hospitalizations with and without an overnight stay. d Ambulatory care visits include visits to physician or nonphysician providers in hospital outpatient departments or emergency rooms 

or doctor’s offices. 

e Does not include emergency room visits leading to a hospital inpatient stay. f Office–based doctor visits includes visits to physician or nonphysician providers. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

17
Table 4. Core servicea expenditures and median and mean expenses per person with expendit

service and income: United States, 2002 

Distribution of total, median, and mean expensesb 

 All incomes Poor or near poor Low income Middle 

Type of service Total Median Mean Total Median Mean Total Median Mean Total M

(mil) (mil) (mil) (mil) 

Inpatient hospital staysd 256,059 5,734 11,855 54,594 5,299 11,118 49,495 5,907 13,317 151,970 

Ambulatory caree 286,799 411 1,330 44,902 373 1,336 36,288 404 1,281 205,609 

Outpatient visits 78,915 581 1,642 11,434 467 1,647 8,684 451 1,345 58,798 

Emergency room visitsf 27,879 377 723 5,166 278 582 4,347 340 686 18,367 

 Office-based provider visitsg 180,004 299 865 28,302 275 896 23,258 287 865 128,444 

Prescription medicines 150,616 271 812 27,784 256 980 22,452 281 928 100,381 

a The core services include hospital services, office-based provider services, and prescription medicines. b Mean and median expenses are for persons with expenses. 

c Poor or near poor—persons in families with income less than 125 percent of the poverty line; low income—persons in families with income from 125 per

of the poverty line; middle or high income—persons in families with income at or over 200 percent of the poverty line. d Hospital inpatient, outpatient, and emergency room expenses include facility charges and separately billing doctor fees. 

e Ambulatory care expenses include expenses for outpatient, emergency room, or office-based doctor services. f Emergency room expenses exclude expenses associated with visits leading to a hospital inpatient stay.

g Office-based provider expenses include expenses for visits to physician and nonphysician providers.

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical Expenditure Panel Survey, 2002

18
 

Table 5. Hospital inpatient expendituresa for poor, near poor, and low-income 

populationsb by selected demographic characteristics: United States, 2002 

Expenses for persons 

 Persons Percent with with an expense 

Population (in thousands) an expense Total Median Mean 

Characteristics (in millions) 

Total 88,256 9.8 104,089 5,616 12,066 

 

Age 

 5 and under 9,892 4.9 — — — 

 6 to17 18,299 2.2 — — — 

 18 to 44 32,612 8.9 23,095 4,359 7,935 

 45 to 64 13,712 12.8 26,910 6,369 15,361 

 65 and over 13,742 22.3 45,425 7,848 14,797 

Gender 

 Male 39,882 7.5 43,439 6,873 14,599 

 Female 48,374 11.7 60,650 5,226 10,731 

Race/ethnicity 

 Hispanic or Latino (of any race) 20,602 6.2 11,466 4,172 9,014 

 Non-Hispanic or Latino 67,654 10.9 92,623 5,912 12,593 

 White, single race 45,327 11.9 72,263 5,978 13,429 

 Black, single race 16,768 9.7 17,328 5,797 10,604 

 Asian, single race 2,729 3.9 — — — 

 Other races/multiple races 2,830 8.2 — — — 

Health Insurance Statusc

 

 Under 65

 any private 28,044 7.1 25,795 5,164 12,902 

 public only 28,203 10.5 27,663 4,426 9,359 

 uninsured 18,267 *3.3 5,206 2,789 8,648 

 65 and over 

 Medicare only 4,603 23.9 17,230 8,436 15,681 

 Medicare and private 6,319 21.0 18,557 6,950 13,989 

 Medicare and other public 2,724 23.4 9,599 8,681 15,042 

Health Statusc

 

 Excellent 21,463 3.7 4,881 4,112 6,110 

 Very Good 24,643 6.0 10,609 4,446 7,205 

 Good 26,468 9.8 36,268 5,462 14,041 

 Fair 10,921 19.0 25,934 6,307 12,513 

 Poor 4,515 35.0 22,906 7,336 14,485 

a

 Expenses for Inpatient services include room and board and all hospital diagnostic and laboratory expenses associated with the 

basic facility charge and payments for separately billed physician inpatient services. Median and mean expenses are for persons 

with expenses. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

— Less than 100 sample cases. 

* Relative standard error equal to or greater than 30 percent. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

19
Table 6. Ambulatory care expendituresa

 for poor, near poor, and low-income 

populationsb by selected demographic characteristics: United States, 2002 

 Expense for persons 

Person Percent with with an expense 

Population characteristics (in thousands) an expense Total Median Mean 

(in millions) 

 

Total 88,256 70.2 81,190 387 1,311 

 

Age 

 5 and under 9,892 79.2 4,116 237 526 

 6 to17 18,299 61.0 5,902 159 529 

 18 to 44 32,612 60.9 23,404 333 1,179 

 45 to 64 13,712 77.0 20,566 646 1,947 

 65 and over 13,742 91.2 27,203 968 2,170 

Gender 

 Male 39,882 61.9 29,674 324 1,203 

 Female 48,374 77.0 51,516 427 1,383 

Race/ethnicity 

 Hispanic or Latino (of any race) 20,602 58.5 11,679 238 969 

 Non-Hispanic or Latino 67,654 73.7 69,511 437 1,394 

 White, single race 45,327 78.0 50,888 515 1,440 

 Black, single race 16,768 65.6 14,627 296 1,329 

 Asian, single race 2,729 56.4 1,782 261 1,158 

 Other races/multiple races 2,830 70.4 2,214 401 1,111 

Health Insurance Statusc

 

 Under 65

 any private 28,044 72.6 21,982 326 1,079 

 public only 28,203 75.1 26,928 324 1,271 

 uninsured 18,267 43.0 5,078 199 647 

 65 and over 

 Medicare only 4,603 91.1 8,470 973 2,021 

 Medicare and private 6,319 92.3 13,612 1,041 2,334 

 Medicare and other public 2,724 90.7 5,102 930 2,065 

Health Statusc

 

 Excellent 21,463 61.6 7,813 221 591 

 Very Good 24,643 65.3 16,559 306 1,030 

 Good 26,468 71.3 24,803 388 1,315 

 Fair 10,921 86.0 18,461 798 1,966 

 Poor 4,515 94.1 13,470 1,309 3,172 

a

 Ambulatory care expenses are for visits to physician or nonphysician providers seen in office-based settings or clinics, hospital 

outpatient departments, hospital emergency rooms and clinics owned and operated by hospitals. The hospital expenses include 

facility charges and separately billing doctor charges. Median and mean expenses are for persons with expenses. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

20
Table 7. Prescription medicines expendituresa

 for poor, near poor, and lowincome populationsb by selected demographic characteristics: United States, 

2002 

Expense for persons with an 

Person Percent with expense 

Population Characteristics (in thousands) an expense Total Median Mean 

(in millions) 

Total 88,256 59.5 50,236 265 956 

 

Age 

 5 and under 9,892 52.1 711 41 138 

 6 to17 18,299 43.0 2,322 64 295 

 18 to 44 32,612 52.4 10,281 150 602 

 45 to 64 13,712 73.9 16,042 752 1,584 

 65 and over 13,742 89.5 20,880 1,131 1,697 

Gender 

 Male 39,882 50.5 19,048 203 946 

 Female 48,374 67.0 31,188 316 962 

Race/ethnicity 

 Hispanic or Latino (of any race) 20,602 45.2 5,431 96 583 

 Non-Hispanic or Latino 67,654 63.9 44,805 332 1,037 

 White, single race 45,327 70.0 35,016 390 1,104 

 Black, single race 16,768 51.8 7,753 204 893 

 Asian, single race 2,729 40.6 474 94 428 

 Other races/multiple races 2,830 60.6 1,562 218 911 

Health Insurance Statusc 

 Under 65

 any private 28,044 60.8 9,939 158 583 

 public only 28,203 58.6 15,932 148 963 

 uninsured 18,267 36.4 3,485 129 525 

 65 and over 

 Medicare only 4,603 89.7 6,137 1,028 1,487 

 Medicare and private 6,319 91.0 9,181 1,114 1,598 

 Medicare and other public 2,724 87.6 5,537 1,560 2,320 

Health Statusc

 

 Excellent 21,463 44.1 2,966 81 313 

 Very Good 24,643 53.7 7,149 141 540 

 Good 26,468 62.7 14,006 294 844 

 Fair 10,921 82.7 15,078 892 1,669 

 Poor 4,515 91.6 11,001 1,958 2,661 

a

 Expenses for all prescribed medicines initially purchased or otherwise obtained during the year, as well as any refills, are included. 

Median and mean expenses are for persons with expenses b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

21
Technical Appendix 

The data source for this report is the Medical Expenditure Panel Survey (MEPS), an 

ongoing annual survey of the civilian noninstitutionalized population that collects detailed 

information on health care use and expenditures (including sources of payment), health 

insurance, health status, access, and quality. MEPS also collects detailed demographic and 

economic information on the people in the households surveyed. Expenditure data in MEPS are 

obtained from both the household interview and the Medical Provider Component, which 

collects data from a sample of respondents’ hospitals, physicians, home health care providers, 

and pharmacies. (See the section “MEPS Expenditures Methodology” in this appendix for more 

details.) 

More information about MEPS can be found at http://www.meps.ahrq.gov. Detailed 

descriptions of the survey and its methodology have been previously published (Cohen JW, 

1997; Cohen SB, 2000; Cohen SB, 2003). 

Definitions 

Expenditures. Expenditures in this report refer to what is actually paid for health care 

services. More specifically, in MEPS, expenditures are defined as the sum of direct payments for 

care received, including out-of-pocket payments for care received and payments made by private 

insurance, Medicare, Medicaid, and other sources. Payments for over-the-counter drugs and 

alternative care services are not included in MEPS total expenditures. Indirect payments not 

related to specific medical events, such as Medicaid Disproportionate Share and Medicare Direct

Medical Education subsidies, are also not included. 

22
This definition of expenditures differs somewhat from that used in predecessor surveys, 

the 1987 National Medical Expenditure Survey and the 1977 National Medical Care Expenditure 

Survey, in which charges rather than payments were used to measure medical expenditures. 

Users who wish to compare the expenditure data presented in this report with data from the 1987 

survey should consult Zuvekas and Cohen (2002). 

Types of services. The expenditures for total health services (Table 2) represent all types 

of services defined in MEPS, including hospital, office-based, home health, dental services, 

prescription medicines, and medical supplies. The expenditures for the core services presented 

in this report represent a subset of the services, including the following: 

• Hospital inpatient services. This category includes room and board and all hospital 

diagnostic and laboratory expenses associated with the basic facility charge, payments for 

separately billed physician inpatient services, and emergency room expenses incurred 

immediately prior to inpatient stays. Expenses for reported hospital stays with the same

admission and discharge dates are also included. Expenses for newborns who left the 

hospital on the same day as the mother are included in the mother’s record. 

• Hospital outpatient services. This category includes expenses for visits to both 

physicians and other medical providers seen in hospital outpatient departments, including 

payments for services covered under the basic facility charge and those for separately 

billed physician services. 

23
• Emergency room services. This category includes expenses for visits to medical 

providers seen in emergency rooms (except visits resulting in a hospital admission). 

These expenses include payments for services covered under the basic facility charge and 

those for separately billed physician services. 

• Office-based medical provider services. This category includes expenses for visits to 

medical providers seen in office-based settings or clinics. 

• Prescription medicines. This category includes expenses for all prescribed medications 

initially purchased or otherwise obtained during 2000, as well as any refills. 

Sources of payment. Estimates of sources of payment presented in this report represent 

the percentage of the total sum of expenditures paid for by each source. Sources of payment are 

classified as follows: 

• Out of pocket by user or family. 

• Private insurance-Includes payments made by insurance plans covering hospital 

and medical care (excluding payments from Medicare, Medicaid, and other public 

sources). Payments from Medigap plans or TRICARE (Armed-Forces-related coverage) 

are also included. Payments from plans that provide coverage for a single service only, 

such as dental or vision coverage, are not included. 

24
• Medicare-A federally financed health insurance plan for the elderly, persons receiving 

Social Security disability payments, and most persons with end-stage renal disease. 

Medicare Part A, which provides hospital insurance, is automatically given to those who 

are eligible for Social Security. Medicare Part B provides supplementary medical 

insurance that pays for medical expenses and can be purchased for a monthly premium. 

• Medicaid-A means-tested government program jointly financed by Federal and 

State funds that provides health care to those who are eligible. Program eligibility 

criteria vary significantly by State, but the program is designed to provide health 

coverage to families and individuals who are unable to afford necessary medical care. 

• Other-Includes payments from the Department of Veterans Affairs (except 

TRICARE); other Federal sources (Indian Health Service, military treatment facilities, 

and other care provided by the Federal Government); various State and local sources 

(community and neighborhood clinics, State and local health departments, and State 

programs other than Medicaid); Workers’ Compensation; various unclassified sources 

(e.g., automobile, homeowner’s, or other liability insurance, and other miscellaneous or 

unknown sources); Medicaid payments reported for persons who were not reported as 

enrolled in the Medicaid program at any time during the year; and private insurance 

payments reported for persons without any reported private health insurance coverage 

during the year. 

25
Age. The respondent was asked to report the age of each family member as of the date of 

each interview. In this report, age is based on the sampled person’s age as of December 31st of 

the reported year. If data were not collected at the end of the year because the sampled person 

was out of scope (e.g., deceased or institutionalized), then age at the time of the last inscope 

interview(s) was used. 

Race/ethnicity. New standards for racial and ethnic classifications were used by the U.S. 

Census Bureau in the 2000 decennial census. All other Federal programs adopted the new 

standards by 2003. These changes conform to the revisions of the standards for the classification 

of Federal data on race and ethnicity promulgated by the Office of Management and Budget 

(OMB) in October 1997. For 1996 through 2002, racial and ethnic classifications were Hispanic, 

white non-Hispanic, black non-Hispanic, and other non-Hispanic. As of 2003, the racial and 

ethnic classifications are Hispanic or Latino, white non-Hispanic or Latino single race, black 

non-Hispanic or Latino single race, and other single race/multiple race non-Hispanic or Latino. 

Health insurance status. Individuals under age 65 were classified into the following three 

insurance categories based on household responses to health insurance status questions 

administered during Rounds 1-3 of the MEPS Household Component. 

• Any private health insurance-Individuals who, at any time during the year, had insurance that 

provides coverage for hospital and physician care (other than Medicare, Medicaid, or other 

public hospital/physician coverage) are classified as having private insurance. Coverage by 

TRICARE (Armed-Forces-related coverage) is also included as private health insurance. 

26
Insurance that provides coverage for a single service only, such as dental or vision coverage, is 

not included. 

• Public coverage only-Individuals are considered to have public coverage only if they met both 

of the following criteria: 

• They were not covered by private insurance at any time during the year. 

• They were covered by one of the following public programs at any point during the 

year: Medicare, Medicaid, or other public hospital/physician coverage. 

• Uninsured-The uninsured are defined as people not covered by Medicare, TRICARE, 

Medicaid, other public hospital/physician programs, or private hospital/physician insurance at 

any time during the entire year or period of eligibility for the survey. Individuals covered only by 

noncomprehensive State-specific programs (e.g., Maryland Kidney Disease Program, Colorado 

Child Health Plan) or private single-service plans (e.g., coverage for dental or vision care only, 

coverage for accidents or specific diseases) are not considered to be insured. 

Individuals age 65 and over were classified into the following three insurance categories: 

• Medicare only. 

• Medicare and private. 

• Medicare and other public. 

27
Income. Each year persons were classified according to their family’s income. In this 

report, income is expressed in terms of poverty status, the ratio of the family’s income to the 

Federal poverty thresholds, which control for the size of the family and the age of the head of the 

family. In this report, the following classification was used. 

• Poor or Near Poor-Persons in families with income less than 125 percent of the poverty line, 

including those whose losses exceeded their earnings, resulting in negative income. 

• Low income-Persons in families with income from 125 percent to less than 200 percent of the 

poverty line. 

• Middle or High income-Persons in families with income at or over 200 percent of the poverty 

line. 

In MEPS, personal income from each household member was summed to create family 

income. Potential income sources asked about in the survey interview include annual earnings 

from wages, salaries, bonuses, tips, and commissions; business and farm gains and losses; 

unemployment and Workers’ Compensation payments; interests and dividends; alimony, child 

support, and other private cash transfers; private pensions; individual retirement account (IRA) 

withdrawals; Social Security and Department of Veterans Affairs payments; Supplemental 

Security Income and cash welfare payments from public assistance; TANF (Temporary 

Assistance for Needy Families, formerly known as Aid to Families with Dependent Children or

AFDC); gains or losses from estates, trusts, partnerships, C corporations, rent, and royalties; and 

a small amount of other income. 

28
Perceived health status. In every round of MEPS, the respondent was asked to rate the 

health of every member of the family. The exact wording of the question is as follows: “In 

general, compared to other people of (PERSON)’s age, would you say that (PERSON)’s health is 

excellent, very good, good, fair, or poor?” In the tables, this variable usually reflects responses to 

the last interview for the calendar year (Round 3 or Round 5). However, if no response was 

obtained from that interview, then reported health status was based on the most recent of the 

prior two interviews. A small proportion of persons had no valid response for health status on 

any of the three interviews. 

Sample Design 

Each year, the MEPS Household Component (HC) sample is drawn from those 

households that completed the prior year’s National Health Interview Survey (NHIS). For 

example, households selected for participation in MEPS Panel 7 (beginning in 2002) completed 

interviews in the 2001 NHIS, the sample for MEPS Panel 6 (beginning in 2001) was drawn from 

the 2000 NHIS, and so on. Because NHIS is used as a sampling frame, the MEPS design is not 

only nationally representative of the civilian noninstitutionalized population, but also includes an 

oversampling of Hispanics and blacks. NHIS is conducted by the National Center for Health 

Statistics (NCHS), Centers for Disease Control and Prevention. 

MEPS collects data via an overlapping panel design. Each household completes five 

interviews (“rounds” of data collection) over a period of 21/2 years, providing data for two full 

calendar years. Data from Rounds 1, 2, and 3 provide information for the first year of estimation, 

and data from Rounds 3, 4, and 5 provide data for the second year of estimates. The estimates in 

29
this report for calendar year 2002 were based on data collected from Rounds 3, 4, and 5 of 

MEPS Panel 6 and Rounds 1, 2, and 3 of MEPS Panel 7. (Note that the reference period for 

Round 3 of a MEPS panel overlaps two calendar years.) In MEPS, a single respondent provides 

most of the information on the health care experience of the entire family via computer-assisted 

personal interviewing (CAPI). 

The MEPS response rate reflects response to both MEPS and NHIS. The overall response 

rate for MEPS Panel 6 in 2001, including the NHIS response rate, was 64.0 percent. The overall 

response rate for Panel 7 in 2002, including the NHIS response rate, was 65.6 percent. The 

response rate for 2002 MEPS annual estimates after combining both panels was 64.7 percent. 

Accuracy of Estimates

The estimates of total expenditures in each table are based on 37,418 sampled persons. 

They were weighted to develop population estimates for a total of 288,181,763 persons who 

were in the U.S. civilian noninstitutionalized population for part or all of 2002. All expenditures 

for persons who were in the target population for the full year, from January 1 through December 

31, 2002, were included in the estimates. People with part-year information include newborns; 

people who died during the year; and people who resided in an institution, were in the military, 

or lived outside the country for part of the year. Expenditures for deceased persons were 

measured for the period from January 1 through the date of death, while those for newborns were 

measured from the date of birth through December 31. Expenses incurred during periods of fulltime active-duty military service, institutionalization, or residency outside the country were not 

included. 

30
Tests of statistical significance were used to determine whether the differences between 

populations exist at specified levels of confidence or whether they occurred by chance. 

Differences were tested using Z-scores having asymptotic normal properties at the 0.05 level of 

significance. Only statistically significant differences between estimates are discussed in the text. 

However, it should be noted that each individual significance test was conducted at the 0.05 

level, which does not control the error rate for all significance tests conducted simultaneously at 

the 0.05 level. 

The statistics presented in this report are affected by both sampling error and sources of 

nonsampling error, which include nonresponse bias, respondent reporting errors (response 

errors), interviewer effects, and data processing misspecifications. The nonsampling errors, such 

as response errors, are difficult to measure, but every effort is made to minimize such errors at 

each step of the MEPS operation. The sampling error, however, can be measured by the variance 

of the estimator. A Taylor-series approach in SUDAAN is used to produce appropriate standard 

errors for weighted estimates from MEPS with its complex survey design. Standard errors for 

the MEPS estimates in this report are shown in Tables A-G. The MEPS person-level estimation 

weights include nonresponse adjustments and poststratification adjustments to population 

estimates derived from the Current Population Survey based on cross-classifications by region, 

MSA status, age, race/ethnicity, and sex. For a detailed description of the MEPS survey design, 

sample design, estimation strategies, and methods used to minimize sources of nonsampling 

error, see JW Cohen (1997), SB Cohen (1997), and SB Cohen (2003). 

Estimates presented in the tables are rounded as follows: 

31
• Percentages are rounded to the nearest 0.1 percentage point. 

• Mean and median expenditures are rounded to the nearest dollar. 

• Total expenditures are rounded to the nearest million dollar unit. 

Some of the estimates for population totals of subgroups presented in the tables will not add 

exactly to the overall estimated population total as a consequence of rounding. 

MEPS Expenditures Methodology

Expenditure estimates in this report are based on the sum of total payments for medical 

events in 2002 reported in the MEPS HC. The HC collected annual data on the use of and 

associated expenditures for office- and hospital-based care, emergency room services, home 

health care, dental services, prescription medicines, and vision aids and other medical equipment 

and services. In addition, the MEPS Medical Provider Component (MPC) collected expenditure 

data from a sample of medical and pharmaceutical providers that provided care and medicines to

sample people in 2002. Expenditure data collected in the MPC are generally regarded as more 

accurate than comparable data collected in the HC and were used to improve the overall quality 

of MEPS expenditure data in this report. For a more detailed description of the MPC, see 

Machlin and Taylor (2000). 

Expenditure data were imputed to replace missing data, provide estimates for care 

delivered under capitated reimbursement arrangements, and adjust household-reported insurance 

payments because respondents were often unaware that their insurer paid a discounted amount to 

the provider. This section contains a general description of the approaches used for these three 

situations. A more detailed description of the editing and imputation procedures is provided in 

32
the documentation for the MEPS event-level files, which are available through the AHRQ Web 

site at http://www.meps.ahrq.gov/. For more information on the approach used to impute missing 

expenditure data on prescription medicines, see Moeller, Stagnitti, Horan, et al. (2001). 

Missing data on expenditures were imputed using a weighted sequential hot-deck 

procedure for most medical visits and services. In general, this procedure imputes data from

events with complete information to events with missing information but similar characteristics. 

For each event type, selected predictor variables with known values (e.g., total charge; 

demographic characteristics; region; provider type; and characteristics of the event of care, such 

as whether it involved surgery) were used to form groups of donor events with known data on 

expenditures, as well as identical groups of recipient events with missing data. Within such 

groups, data were assigned from donors to recipients, taking into account the weights associated 

with the complex MEPS survey design. Only MPC data were used as donors for hospital-based 

events, while data from both the HC and MPC were used as donors for office-based physician 

visits. 

Because payments for medical care provided under capitated reimbursement 

arrangements and through public clinics and Department of Veterans Affairs (VA) hospitals are 

not tied to particular medical events, expenditures for events covered under those types of 

arrangements and settings were also imputed. Events covered under capitated arrangements were 

imputed from events covered under managed care arrangements that were paid based on a 

discounted fee-for-service method, while imputations for visits to public clinics and VA

hospitals were based on similar events that were paid on a fee-for-service basis. As for other 

events, selected predictor variables were used to form groups of donor and recipient events for 

the imputations. 

33
An adjustment also was applied to some HC-reported expenditure data because an 

evaluation of matched HC/MPC data showed that respondents who reported that charges and 

payments were equal were often unaware that insurance payments for the care had been based on

a discounted charge. To compensate for this systematic reporting error, a weighted sequential 

hot-deck imputation procedure was implemented to determine an adjustment factor for HCreported insurance payments when charges and payments were reported to be equal. As for the 

other imputations, selected predictor variables were used to form groups of donor and recipient 

events for the imputation process. 

In some situations, it was reported that one charge covered multiple contacts between a 

sampled person and a medical provider (e.g., obstetrical services, orthodontia). In these 

situations, total payments for the fee (sometimes called a flat or global fee) were included if the 

initial service was provided in 2002. For example, all payments for an orthodontist’s fee that 

covered multiple visits over 3 years were included if the initial visit occurred in 2002. However, 

if a 2002 visit to an orthodontist was part of a flat fee for which the initial visit occurred in 2001, 

then none of the payments for the flat fee were included. Most of the expenditures for medical 

care reported by MEPS participants were associated with medical events that were not part of a 

flat-fee arrangement. 

Sample respondents sometimes reported medical events for which no payments actually 

were made. This situation could occur for several reasons, including when free care or a free 

sample of medicine was provided, bad debt was incurred, no charge was made for a followup 

visit (e.g., after a surgical procedure), or care was covered under a flat-fee arrangement 

beginning in an earlier year. These types of events were treated as valid $0 payments when 

developing the estimates contained in this report. 

34
Because of methodological differences, caution should be used when comparing the 

estimates in this report with data from other sources. National health care expenditures from

MEPS, for example, are lower than the expenditures for personal health care typically cited from

the National Health Accounts (NHA) of the Centers for Medicare & Medicaid Services. The 

primary reasons for the differences are that the NHA include a wider variety of expenses and 

also include expenses for people who are not part of the community population. A comparison of 

MEPS and NHA estimates for comparable expenditures and population has been previously 

published (Selden, Levit, Cohen, et al., 2001). 

35
Table A. Standard errors for distribution of the civilian community population 

by selected demographic characteristics and income: United States, 2002 

Corresponds to Table 1

 Percent of population by incomea

 

All Poor or Low Middle or high 

Population characteristics income near poor income income 

Standard error 

Total population (in millions) 5,848 1,594 1,369 4,545 

 

Age 

 5 and under 0.19 0.50 0.50 0.22 

 6 to 17 0.26 0.66 0.67 0.30 

 18 to 44 0.33 0.66 0.79 0.40 

 45 to 64 0.33 0.60 0.60 0.42 

 65 and over 0.36 0.69 1.03 0.38 

Sex 

 Male 0.26 0.66 0.78 0.28 

 Female 0.26 0.66 0.78 0.28 

Race/ethnicity 

 Hispanic or Latino (of any race) 0.65 1.37 1.34 0.50 

 Non-Hispanic or Latino 0.65 1.37 1.34 0.50 

 White, single race 0.85 1.63 1.49 0.72 

 Black, single race 0.55 1.25 1.06 0.46 

 Asian, single race 0.30 0.48 0.71 0.35 

 Other single/multiple races 0.23 0.53 0.43 0.19 

Health insurance statusb

 Under 65

 Any private 0.65 0.85 1.40 0.44 

 Public only 0.49 1.11 1.01 0.22 

 Uninsured 0.37 0.87 1.10 0.35 

 65 and over 

 Medicare only 1.10 2.19 2.12 1.37 

 Medicare and private 1.22 2.37 2.39 1.44 

 Medicare and other public 0.67 2.19 1.57 0.49 

Health statusc

 

 Excellent 0.50 0.86 0.95 0.60 

 Very Good 0.41 0.87 1.11 0.49 

 Good 0.39 0.84 0.93 0.41 

 Fair 0.19 0.50 0.54 0.20 

 Poor 0.13 0.35 0.38 0.11

a Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. b

 Uninsured refers to persons uninsured for the entire year. Public and private health insurance categories refer to individuals with 

public or private insurance at any time during the period; individuals with both public and private insurance and those with TRICARE 

(Armed Forces-related coverage) are classified as having private insurance. Counts may not add up to the total population because 

data on this variable were not available for some sampled persons. c

 Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

36
Table B. Standard errors for total health care expendituresa and median and mean expenditure

expense by age, income and source of payment: United States, 2002 Corresponds to Table 2 

Distribution of expenses Percent distribution o

Percent with Total for persons with an expensec Out of Private Medicare 

Incomeb and Age an expense expenses Median Mean Pocket insuranced

Standard error

All ages 0.32 21,307 20 67 0.43 0.90 0.85  Poor or Near Poor 0.70 8,149 47 195 0.78 1.86 1.89  Low Income 0.74 7,951 55 224 1.00 2.78 2.67  Middle or High Income 0.31 15,460 22 65 0.50 1.01 1.00 0 to 64 Poor or Near Poor 0.78 5,666 30 161 1.04 3.00 2.32  Low Income 0.89 5,888 22 213 1.13 3.89 1.80  Middle or High Income 0.33 11,428 17 52 0.59 1.04 0.40 65 and over  Poor or Near Poor 0.75 4,521 241 596 1.00 0.95 2.46  Low Income 0.84 5,299 191 614 1.59 2.24 3.42  Middle or High Income 0.40 8,652 95 282 0.94 1.08 1.61 

a Total includes expenditures for hospital services, office-based provider services, home health care, dental services, prescription medicines, and medicab Poor or Near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with income from 125 perc

of the poverty line; middle or high income—persons in families with income at or over 200 percent of the poverty line.

c All expense distribution, including means and medians, are based on persons with an expense. d Private insurance includes TRICARE (Armed Forces-related coverage).

e Other includes payments from the Department of Veterans Affairs (except TRICARE); other Federal sources (Indian Health Service, military treatment f

provided by the Federal Government); various state and local sources (community and neighborhood clinics, state and local health departments, and Sta

Medicaid); Worker’s Compensation; various unclassified sources (e.g., automobile, homeowner’s, or other liability insurance, and other miscellaneous or 

payments reported for persons who were not reported as enrolled in the Medicaid program at any time during the year; and private insurance payments r

any reported private health insurance coverage during the year. Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical Expenditure Panel Survey, 2002

37
Table C. Standard errors for distribution of people with health care expenditures 

for core servicesa by type of service and income: United States, 2002 

Corresponds to Table 3 

 

 Income groupsb 

All incomes Poor or Low Middle or 

Type of service near poor income high income

 Standard error

Total population (in millions) 5,848 1,594 1,369 4,545 

 

Inpatient hospital staysc 0.18 0.43 0.52 0.19 

 

Ambulatory cared 0.39 0.86 0.90 0.43 

 Outpatient visits 0.37 0.62 0.78 0.41 

 Emergency Room visitse

 0.25 0.67 0.68 0.25 

 Office-based doctor visitsf 0.41 0.88 0.92 0.44 

 

Prescription medicines 0.43 0.91 0.93 0.46 

a Core services include hospital services, office-based provider services, and prescription medicines. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Inpatient stays include hospitalizations with and without an overnight stay. d Ambulatory care visits include visits to physician or nonphysician providers in hospital outpatient departments or emergency rooms 

or doctor’s offices. 

e Does not include emergency room visits leading to a hospital inpatient stay. f Office–based doctor visits includes visits to physician or nonphysician providers. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

38
39

Table D. Standard errors for core servicea expenditures and median and mean

expenditures per person with expense by type of service and income: United

States, 2002

able D. Standard errors for core servicea expenditures and median and mean

expenditures per person with expense by type of service and income: United

States, 2002

Corresponds to Table 4 

Distribution of total, median, and mean tal, median, and mean 

expenses by incomec

 All income Poor or near poor Low income Middle or high

Type of service Median Mean Median Mean Median Mean Median

Standard error

Inpatient hospital staysd 155 451 266 1044 448 1381 209

Ambulatory caree 7 23 16 59 20 58 8

Emergency Room visitsf 8 22 11 39 25 50 11

Office-based provider visitsg 5 15 9 39 13 42 5

 

Prescription medicines 7 16 18 40 21 44 8

a The core services include hospital services, office-based provider services, and prescription medicines. b Mean and median expenses are for persons with expenses. c Poor or near poor—persons in families with income less than 125 percent of the poverty line; low income—persons in families with 

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or

over 200 percent of the poverty line. d Hospital inpatient, outpatient, and emergency room expenses include facility charges and separately billing doctor fees. e Ambulatory care expenses include expenses for outpatient, emergency room, or office-based doctor services. f Emergency room expenses exclude expenses associated with visits leading to a hospital inpatient stay. g Office-based provider expenses include expenses for visits to physician and nonphysician providers.

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.
Table E. Standard errors for hospital inpatient expendituresa

 for poor, near poor, 

and low-income populationsb by selected demographic characteristics: United 

States, 2002 

Corresponds to Table 5 

 Expense for persons 

Percent with with an expense 

Population characteristics an expense Total Median Mean

(in millions) Standard error

Total 0.37 8,793 231 842 

 

Age 

 5 and under 0.65 — — — 

 6 to17 0.32 — — — 

 18 to 44 0.47 2,646 259 789 

 45 to 64 0.95 4,539 750 2,310 

 65 and over 1.15 5,362 574 1,299 

Gender 

 Male 0.45 5,951 702 1,678 

 Female 0.51 5,891 183 870 

Race/ethnicity 

 Hispanic or Latino (of any race) 0.45 1,905 297 1,161 

 Non-Hispanic or Latino 0.45 8,492 319 945 

 White, single race 0.58 8,011 375 1,194 

 Black, single race 0.73 2,234 551 1,224 

 Asian, single race 1.24 — — — 

 Other races/multiple races 1.38 — — — 

Health Insurance Statusc

 Under 65

 any private 0.53 5,121 344 2,293 

 public only 0.61 3,021 337 852 

 uninsured *0.49 1,576 573 2,354 

 65 and over 

 Medicare only 2.10 3,250 1,332 2,141 

 Medicare and private 1.80 3,427 819 1,892 

 Medicare and other public 2.22 1,592 1,015 2,119 

Health Statusc

 

 Excellent 0.44 907 409 782 

 Very Good 0.49 1,346 405 747 

 Good 0.60 6,179 461 2,038 

 Fair 1.17 3,322 560 1,431 

 Poor 2.52 3,037 943 1,404 

a

 Expenses for Inpatient services include room and board and all hospital diagnostic and laboratory expenses associated with the 

basic facility charge and payments for separately billed physician inpatient services. Median and mean expenses are for persons 

with expenses. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

— Less than 100 sample cases. 

* Relative standard error equal to or greater than 30 percent. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

40
Table F. Standard errors for ambulatory care expendituresa

 for poor, near poor, 

and low-income populationsb by selected demographic characteristics: United 

States, 2002

Corresponds to Table 6 

Total Expenses for persons 

Percent expenses with an expense 

Population characteristics with use in millions Median Mean

 Standard error

Total 0.69 3,293 13 44 

 

Age 

 5 and under 1.39 306 11 33 

 6 to17 1.33 592 8 49 

 18 to 44 0.91 1,498 16 65 

 45 to 64 1.09 1,448 45 121 

 65 and over 0.84 1,971 58 114 

Gender 

 Male 0.86 1,873 14 66 

 Female 0.66 2,191 16 49 

Race/ethnicity 

 Hispanic or Latino (of any race) 1.23 1,180 11 71 

 Non-Hispanic or Latino 0.73 3,160 17 53 

 White, single race 0.79 2,484 23 54 

 Black, single race 1.54 1,654 22 133 

 Asian, single race 4.04 517 45 303 

 Other races/multiple races 3.75 416 53 110 

Health Insurance Statusc

 

 Under 65

 any private 1.02 1,406 16 58 

 public only 1.03 1,837 14 74 

 uninsured 1.28 476 12 53 

 65 and over 

 Medicare only 1.27 1,091 84 208 

 Medicare and private 1.33 1,338 108 171 

 Medicare and other public 1.76 696 81 208 

Health Statusc

 

 Excellent 1.33 562 10 34 

 Very Good 1.03 1,250 16 66 

 Good 1.10 1,837 26 89 

 Fair 1.18 1,390 46 124 

 Poor 0.91 1,364 106 286 

a

 Expenses for ambulatory services include visits to physician or nonphysician providers seen in office-based settings or clinics, 

hospital outpatient departments, hospital emergency rooms (including visits resulting in an overnight hospital stay), and clinics 

owned and operated by hospitals. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

41
Table G. Standard errors for prescription medicines expendituresa

 for poor, near 

poor, and low-income populationsb by selected demographic characteristics: 

United States, 2002 

Corresponds to Table 7 

Total Expenses for persons 

Percent expenses with an expense 

Population Characteristics with use in millions Median Mean

 Standard Error

Total 0.70 2,183 15 33 

 

Age 

 5 and under 1.72 96 4 16 

 6 to17 1.26 368 5 44 

 18 to 44 0.97 761 9 37 

 45 to 64 1.12 1,011 49 77 

 65 and over 0.91 1,349 61 69 

Gender 

 Male 0.92 1,216 16 51 

 Female 0.75 1,393 18 35 

Race/ethnicity 

 Hispanic or Latino (of any race) 1.23 556 6 46 

 Non-Hispanic or Latino 0.77 2,117 19 38 

 White, single race 0.82 1,887 24 44 

 Black, single race 1.53 713 23 62 

 Asian, single race 3.81 107 28 80 

 Other races/multiple races 3.52 301 64 99 

Health Insurance Statusc

 Under 65

 any private 1.07 716 10 37 

 public only 1.14 1,089 12 57 

 uninsured 1.29 369 14 47 

 65 and over 

 Medicare only 1.27 560 89 92 

 Medicare and private 1.26 742 85 71 

 Medicare and other public 2.15 698 151 217 

Health Statusc

 

 Excellent 1.19 263 6 26 

 Very Good 1.15 440 10 27 

 Good 1.05 847 22 42 

 Fair 1.17 1,058 62 88 

 Poor 1.45 921 97 139 

a

 Expenses for all prescribed medicines initially purchased or otherwise obtained during the year, as well as any refills, are included. 

Free samples are included in the estimate of percentage of persons with any expense. b Poor or near poor—person in families with income less than 125 percent of the poverty line; low income—persons in families with

income from 125 percent to less than 200 percent of the poverty line; middle or high income—persons in families with income at or 

over 200 percent of the poverty line. c Counts may not add up to the total population because data on this variable were not available for some sampled persons. 

Note: Restricted to civilian noninstitutionalized population. Percents may not add to 100 because of rounding. 

Source: Center for Financing, Access, and Cost Trends (CFACT), Agency for Healthcare Research and Quality: Medical 

Expenditure Panel Survey, 2002.

42