Medical Expenditure Panel Survey 

Agency for Healthcare 

Research and Quality

STATISTICAL BRIEF #217 

August 2008 

Highlights 

 In 2005, about one of every 

10 persons had total health 

care expenditures greater 

than $7,500 and almost 5 

percent had expenditures 

greater than $15,000. 

 In 2005, 11.6 percent of 

persons had out-of-pocket 

health care expenditures of 

more than $1,500 while 4.2 

percent had out-of-pocket 

expenditures greater than 

$3,000. 

 The proportion of persons with 

high levels of total medical 

expenses and the proportion 

with high out-of-pocket 

expenses increased 

dramatically with age. 

 The proportion of adults age 

18−64 with public only 

insurance (primarily Medicaid) 

that had total health care 

expenditures over $15,000 

was more than twice that for 

those with private insurance 

coverage. 

 Elderly persons age 65 and 

over with Medicare and other 

public insurance were more 

likely to have health care 

expenditures above $15,000 

than their counterparts 

with Medicare only or 

Medicare and supplemental 

private coverage. 

 Despite a lower likelihood of 

uninsured adults having high 

total medical expenses, the 

likelihood of the uninsured 

having high out-of-pocket 

expenses was similar to that 

for their counterparts with 

private insurance coverage. 

 The likelihood of an individual 

having out-of-pocket 

expenses exceeding $3,000 

did not vary significantly by 

family income status. 

Persons with High Health Care 

Expenditures: Proportions by Age and 

Insurance Coverage, 2005 

Steven R. Machlin, MS, and Joel W. Cohen, PhD 

Introduction 

The likelihood of a person having high medical expenses (in total or 

out of pocket) is affected by several factors, including health status, 

decisions about health care use by individuals and their health care 

providers, whether the person is insured, and the generosity of 

insurance for those with coverage. 

This Brief provides estimates from the 2005 Medical Expenditure 

Panel Survey (MEPS) of proportions of the population with high 

medical expenditures by age and insurance coverage. All differences 

between estimates discussed in the text are statistically significant at 

the .05 level or better. 

Estimates are provided separately for total and out-of-pocket 

expenses. Total expenses include payments from all sources 

(including third-party payers and other miscellaneous sources) to 

hospitals, physicians, dental providers, pharmacies and other health 

care providers for services reported in the MEPS Household 

Component (HC), but does not include health insurance premiums. 

Out-of-pocket expenses comprise the portion of total payments 

made by individuals and families for services received. 

We first present variations by age for two selected thresholds of total 

expenses ($7,500 and $15,000) and two selected thresholds of outof-pocket expenses ($1,500 and $3,000).1

 Then we examine 

variation in the proportions above the higher thresholds for adults 

age 18−64 and the elderly age 65 and over by insurance coverage. 

We also examine variations in individual high out-of-pocket 

expenses by family income status. 

1

 These thresholds were selected to roughly approximate the 90th and 95th percentile 

expenditure levels. The actual values of these percentiles were $7,628 and $14,095 

respectively for total expenses, and $1,692 and $2,710 respectively for out-of-pocket 

expenses. 

1
2

Findings 

Variations by age 

Total expenses (Figure 1) 

In 2005, about one of every 10 persons had health care expenditures greater than $7,500 and almost 5 

percent had expenditures greater than $15,000. However, the proportion of persons with high levels of 

medical expenses increased dramatically with age. For example, only 2.5 percent of children under 18 

and 6.2 percent of adults age 18−44 had medical expenses greater than $7,500. In contrast, more than 

one of every four persons age 65 and over had expenses greater than $7,500 and about 15 percent had 

expenses that exceeded $15,000. 

Out-of-pocket expenses (Figure 2) 

In 2005, 11.6 percent of persons had out-of-pocket health care expenditures greater than $1,500 while 

4.2 percent had out-of-pocket expenditures greater than $3,000. As for total expenses, the proportion of 

persons with high levels of out-of-pocket medical expenses increased dramatically with age. For 

example, only 3.1 percent of children under 18 and 6.4 percent of adults age 18−44 had out of pocket 

expenses greater than $1,500. In contrast, nearly one-third of persons age 65 and over had out-ofpocket expenses greater than $1,500 and 13.1 percent had expenses that exceeded $3,000. 

Variations among adults by insurance coverage 

Figures 3−5 cover variations by insurance coverage for adults age 18−64 and the elderly age 65 and 

over. Variations for children under 18 are not analyzed because of insufficient sample sizes. 

Distributions of adults by insurance coverage (Figure 3) 

Nearly three quarters of adults age 18−64 had private insurance coverage at some point during the year 

(73.7 percent) while an additional 9.2 percent had public only coverage (primarily Medicaid). About 17 

percent of persons age 18−64 were uninsured throughout the year. 

Among persons age 65 and over covered by Medicare (which comprises the overwhelming majority of the 

elderly population), most had supplementary private coverage (59.3 percent) while 12.7 percent had other 

public coverage. About one-quarter of elderly persons (28.0 percent) were covered by Medicare only. 

Total expenses (Figure 4) 

The proportion of adults age 18−64 with public only insurance (primarily Medicaid) that had total health 

care expenditures over $15,000 was more than twice that for those with private insurance coverage (10.1 

versus 3.8 percent). Only 1.0 percent of uninsured adults age 18−64 had expenditures greater than 

$15,000. The greater likelihood of high expenses for persons with public only coverage is consistent with 

a substantially higher proportion in fair or poor health (36 percent versus 10 percent of other adults age 

18-64—data not shown in a figure). 

Elderly persons age 65 and over with Medicare and other public insurance (primarily Medicaid) were 

more likely to have health care expenditures above $15,000 (21.8 percent) than those with Medicare only 

or Medicare and supplemental private coverage (about 14 percent for each group). This difference is 

consistent with a higher proportion of persons with Medicare and other public insurance being in fair or 

poor health (44 percent versus 22 percent of other elderly persons—data not shown in a figure). 

Out-of-pocket expenses (Figures 5 and 6) 

Adults age 18−64 with public only insurance (primarily Medicaid) were slightly more likely to have out-ofpocket health care expenditures over $3,000 than their counterparts with private coverage or no 

insurance (5.1 versus 3.5 percent for both the privately insured and uninsured) (Figure 5). 

The likelihood of the uninsured having high out-of-pocket expenses did not differ from that for those with 

private insurance coverage (3.5 percent) despite a lower likelihood of having total medical expenses 

above the $15,000 threshold (see Figure 4). 
3

Among persons age 65 and over, those with Medicare and other public insurance coverage were least 

likely (7.4 percent) while those with Medicare only were most likely (17.5 percent) to have out-of-pocket 

health care expenditures greater than $3,000. 

The likelihood of having out-of-pocket expenses that exceeded $3,000 did not vary significantly by family 

income status among either adults age 18−64 or the elderly age 65 and over (Figure 6). Nonetheless, an 

individual having expenses above $3,000 constitutes a greater burden for lower income than higher 

income families. 

Definitions 

Expenses for health care 

Total: Includes payments from all sources (including third-party payers and other miscellaneous sources) 

to hospitals, physicians, dental providers, pharmacies and other health care providers for services 

reported in the MEPS Household Component of the survey, but does not include health insurance 

premiums. 

Out-of-pocket: The portion of total expenses paid by individuals and families for services received during 

the year. 

Health insurance status 

Based on household responses to health insurance status questions, adults age 18−64 were classified in 

the following three insurance categories: 

– 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). Coverage by TRICARE (Armed Forces–related coverage) was also 

included as private health insurance. Insurance that provides coverage for a single service only, such as 

dental or vision coverage, was not included. 

– Public coverage only: Individuals who met both of the following criteria: 1) not covered by private 

insurance at any time during the year, 2) were covered by any of the following public programs at any 

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

– Uninsured: Persons not covered by private hospital/physician insurance, TRICARE, Medicare, 

Medicaid, or other public hospital/physician programs at any time during the entire year (or period of 

eligibility for the survey if that was less than a year). 

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

– Medicare and private insurance: This category includes persons covered by Medicare and a 

supplementary private policy. 

– Medicare and other public insurance: This category includes persons classified as Medicare 

beneficiaries who were not covered by private insurance at any point during the year but were covered by 

Medicaid or other public hospital/physician coverage at some point during the year. 

– Medicare only: Persons classified as Medicare beneficiaries but not classified in either of the two 

categories above. 

A small proportion of persons age 65 and over (about 1 percent) were not classified into one of these 

categories for various reasons (e.g., uninsured, private insurance only). 
4

Family income status 

Personal income from all family members within a household was summed to create family income. 

Based on the ratio of family income to the Federal poverty thresholds, which vary with family size and age 

of the head of family, categories are defined as follows: 

– Poor: Persons in families with income less than 100 percent of the poverty line, including those who 

reported negative income. 

– Low income: Persons in families with income from 100–199 percent of the poverty line. 

– Middle income: Persons in families with income from 200–399 percent of the poverty line. 

– High income: Persons in families with income of at least 400 percent of the poverty line. 

About MEPS-HC 

The MEPS Household Component (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 (301-427-1406) or 

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

References 

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 Healthcare Policy and 

Research, 1997. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr1/mr1.shtml 

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. http://www.meps.ahrq.gov/mepsweb/data_files/publications/mr2/mr2.shtml 

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 

Machlin, S., and Cohen J. Persons with High Health Care Expenses: Proportions by Age and Insurance 

Coverage, 2005. Statistical Brief #217. August 2008. Agency for Healthcare Research and Quality, 

Rockville, MD, http://www.meps.ahrq.gov/mepsweb/data_files/publications/st217/stat217.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 MEPSProjectDirector@ahrq.hhs.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 
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

2.4

6.2

10.2

2.5

6.2

29.5

14.0

1.0

14.8

4.6

0

5

10

15

20

25

30

All Ages <18 18-44 45-64 65+

 >$7,500 >$15,000

Percentage

Figure 1. Percentage of persons with total 

health care expenditures above 

selected thresholds, by age, 2005

Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

2.1

5.9

11.6

3.1

6.4

32.0

17.3

1.3

13.1

4.2

0

5

10

15

20

25

30

35

All Ages <18 18-44 45-64 65+

 >$1,500 >$3,000

Percentage

Figure 2. Percentage of persons with 

out-of-pocket expenditures above selected 

thresholds, by age, 2005

Statistical Brief #217: Persons with High Health Care Expenditures: Proportions by Age and 

Insurance Coverage, 2005 

5
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

9.2

17.1

73.7

Private Public Uninsured

28.0

59.3

12.7

Medicare only Medicare & Private Medicare & Public

Ages 18−64 Age 65 & Over

Figure 3. Distribution of adults 

by insurance coverage, 2005

Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

Figure 4. Percentage of adults with 

total health care expenditures above 

$15,000, by insurance coverage, 2005

3.8

10.1

1.0

13.6 14.0

21.8

0

5

10

15

20

25

Private

Public

Uninsured

Medicare only

Medicare & Private

Medicare & Public

Ages 18−64 Age 65 & Over

Percentage

Statistical Brief #217: Persons with High Health Care Expenditures: Proportions by Age and 

Insurance Coverage, 2005 

6
Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

Figure 5. Percentage of adults with out-of-pocket 

health care expenditures above 

$3,000, by insurance coverage, 2005

3.5

5.1

3.5

17.5

12.5

7.4

0

2

4

6

8

10

12

14

16

18

20

Private

Public

Uninsured

Medicare only

Medicare & Private

Medicare & Public

Ages 18−64 Age 65 & Over

Percentage

Source: Center for Financing, Access, and Cost Trends, AHRQ, Household Component of the Medical Expenditure Panel Survey, 2005

Figure 6. Percentage of adults with 

out-of-pocket health care expenditures above 

$3,000, by family income status, 2005

3.2 3.5 3.4 3.9

12.0 12.8 12.9

13.9

0

2

4

6

8

10

12

14

16

18

20

Poor

Low income

Middle Income

High Income

Poor

Low Income

Middle Income

High Income

Ages 18−64 Age 65 & Over

Percentage

Statistical Brief #217: Persons with High Health Care Expenditures: Proportions by Age and 

Insurance Coverage, 2005 

7