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Performance Budget Submission for Congressional Justification

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Medical Expenditure Panel Survey (MEPS)

Authorizing Legislation: Federal funds pursuant to Title IX and Section 927(c) of the Public Health Service Act.

  FY 2004
Actual
FY 2005
Appropriation
FY 2006
Estimate
Increase or
Decrease
Percent
Change
Safety/Quality BA 0 0 0    
PHS Eval 0 0 0    
Efficiency BA 0 0 0    
PHS Eval $55,300,000 $55,300,000 $55,300,000 $- 0.00%
Effectiveness BA 0 0 0    
PHS Eval 0 0 0    
Organizational
Excellence
BA 0 0 0    
PHS Eval 0 0 0    
Total BA 0        
PHS Eval $55,300,000 $55,300,000 $55,300,000 $ - 0.00%
FTEs NA NA NA    

A. Statement of Budget

A total of $55,300,000 is provided for Medical Expenditure Panel Survey (MEPS). These funds will be used to support the contracts and IAAs used for the conduct of the MEPS.

B. Program Description

The MEPS is the only national source for annual data on how Americans use and pay for medical care. It supports all of AHRQ's research related strategic goal areas. The survey collects detailed information from families on access, use, expense, insurance coverage and quality. Data are disseminated to the public through printed and web-based tabulations, micro data files and research reports/journal articles.

The data from the MEPS have become a linchpin for the public and private economic models projecting health care expenditures and utilization. This level of detail enables public and private sector economic models to develop national and regional estimates of the impact of changes in financing, coverage, and reimbursement policy, as well as estimates of who benefits and who bears the cost of a change in policy. No other surveys provide the foundation for estimating the impact of changes on different economic groups or special populations of interest, such as the poor, elderly, veterans, the uninsured, or racial/ethnic groups. Government and non-governmental entities rely upon these data to evaluate health reform policies, the effect of tax code changes on health expenditures and tax revenue, and proposed changes in government health programs such as Medicare. In the private sector (e.g., RAND, Heritage Foundation, Lewin-VHI, and the Urban Institute), these data are used by many private businesses, foundations and academic institutions to develop economic projections. These data represent a major resource for the health services research community at large. Since 2000, data on premium costs from the MEPS Insurance Component have been used by the Bureau of Economic Analysis to produce estimates of the GDP for the nation. In addition, the MEPS establishment surveys have been coordinated with the National Compensation Survey conducted by the Bureau of Labor Statistics through participation in the Inter-Departmental Work Group on Establishment Health Insurance Surveys.

C. Performance Analysis

The MEPS is part of AHRQ's Efficiency strategic plan area and the Data Development Portfolio. The first MEPS data (from 1996) became available in April 1997. This rich data source has become not only more comprehensive and timely, but MEPS' new design has enhanced analytic capacities, allowed for longitudinal analyses, and developed greater statistical power and efficiency. During the last few years, AHRQ has developed a series of Statistical Briefs using MEPS data. These briefs, released on the MEPS Web site, provide timely statistical estimates on topics of current interest to policymakers, medical practitioners and the public at large. During 2004, topics included diabetes, obesity, expenditures and insurance coverage. MEPS has also met all of its performance goals in terms of data products and data release.

National Survey Details Changes in Expenses for Prescribed Medications

In 1987, approximately 57 percent of the 239.4 million persons in the U.S. civilian noninstitutionalized population purchased 1.2 billion prescribed medicines at a total expenditure of $35.1 billion (in 2002 dollars), while in 2002 approximately 64 percent of 288.2 million persons purchased close to 2.7 billion prescribed medicines for $151 billion. For those with a prescribed medicine expense, average total expenditures for prescribed medicines rose significantly from 1987 to 2002, from $256 in 1987 (in 2002 dollars) to $812 in 2002.

A similar pattern was observed when comparing average total out-of-pocket expenditures for prescribed medicines for those with a prescribed medicine expense, going from $146 in 1987 (in 2002 dollars) to $344 in 2002 (Figure 1, 11 KB).

State Differences in the Cost of Job-Related Health Insurance, 2002

Nationwide, the average premiums were $3,189 for single coverage, $6,043 for employee-plusone coverage, and $8,469 for family coverage. Among the 10 largest states, single premiums ranged from $2,936 in California to $3,458 in Illinois, employee-plus-one premiums ranged from $5,306 in Georgia to $6,778 in New Jersey, and family premiums ranged from $7,944 in Georgia to $9,424 in New Jersey. Contributions towards health insurance premiums made by employees nationwide averaged $565 for single coverage, $1,220 for employee-plus-one coverage, and $1,987 for family coverage. Among the 10 largest states, employee contributions for single coverage ranged from $446 in California to $687 in Georgia, for employee-plus-one coverage from $949 in Michigan to $1,437 in Texas, and for family coverage from $1,361 in Michigan to $2,298 in Texas.

Table 2: Average Annual Health Insurance Premium per Enrolled Employee at Private-Sector Establishments Offering Health Insurance: United States and Ten Largest States, 2002

State Single
Coverage
Employee-Plus-
One Coverage
Family
Coverage
United States $3,189 $6,043 $8,469
California $2,936 $5,643 $8,380
Texas $3,268 $5,854 $8,837
New York $3,326 $6,225 $8,691
Florida $3,258 $5,941 $8,748
Illinois $3,458 $6,712 $9,067
Pennsylvania $3,311 $6,590 $8,217
Ohio $3,087 $5,860 $8,163
Michigan $3,250 $6,538 $8,452
New Jersey $3,453 $6,778 $9,424
Georgia $3,047 $5,306 $7,944

Source: Center for Financing Access and Cost Trends, AHRQ, Medical Expenditure Panel Survey—Insurance Component, 2002, Tables II.C.1, II.D.1, II.E.1

MEPS Impact

Since its inception in 1996, MEPS has been used in several hundred scientific publications, and many more unpublished reports.

  • The MEPS has been used to estimate the impact of the recently passed Medicare Modernization Act (MMA) by the Employee Benefit Research Institute (the effect of the MMA on availability of retiree coverage), by the Iowa Rural Policy Institute (effect of the MMA on rural elderly) and by researchers to examine levels of spending and copayments (Curtis, et al, Medical Care, 2004).
  • The MEPS has been used in Congressional testimony on the impact of health insurance coverage rate increases on small businesses.
  • The MEPS-IC has been used by a number of States in evaluating their own private insurance issues including eligibility and enrollment by the State of Connecticut; and community rating by the State of New York. As part of the Robert Wood Johnson Foundation's State Coverage Initiative, MEPS data was cited in 69 reports, representing 27 states.
  • MEPS data have been used in DHHS reports to Congress on expenditures by sources of payment for individuals afflicted by conditions that include acute respiratory distress syndrome, arthritis, cancer, chronic obstructive pulmonary disease, depression, diabetes, and heart disease.
  • MEPS data are used to develop estimates provided in the Consumers Checkbook Guide to Health Plans, of expected out-of-pocket costs (premiums, deductibles and copays) for Federal employees and retirees for their health care. The Checkbook is an annual publication that provides comparative information on the health insurance choices offered to Federal workers and retirees.
  • MEPS data has been extensively used to examine the pharmacological treatment of many conditions including depression (in both adults and children), back pain, ADHD, obesity, hypertension and cardiovascular diseases.
  • MEPS data has been used by CDC and others to evaluate the cost of common conditions including arthritis, injuries, diabetes and cancer.
  • MEPS data has been used to examine quality of care, including the receipt of preventive care and barriers to that receipt.

D. Rationale for the FY 2006 Request

The FY 2006 Request for the Medical Expenditure Panel Survey (MEPS) totals $55,300,000 in PHS evaluation funds, maintaining the FY 2005 Appropriation.

Continuation of MEPS Activities

The FY 2006 funding for MEPS will be used to maintain enhancements to the sample size and content of the MEPS Household and Medical Provider Surveys necessary to satisfy the congressional mandate to submit an annual report on national trends in health care quality and to prepare an annual report on health care disparities. The MEPS Household Component sample size is maintained at 15,000 households in 2006 with full calendar year information. These sample size specifications for the MEPS permit more focused analyses of the quality of care received by special populations due to significant improvements in the precision of survey estimates. This design, in concert with the survey enhancements initiated in prior years, significantly enhances AHRQ's capacity to report on the quality of care Americans receive at the national and regional level, in terms of clinical quality, patient satisfaction, access, and health status both in managed care and fee-for-service settings.

These funds will also permit the continuation of an oversample in MEPS of Asian and Pacific Islanders and individuals with incomes <200% of the poverty level in MEPS. These enhancements, in concert with the existing MEPS capacity to examine differences in the cost, quality and access to care for minorities, ethnic groups and low income individuals, will provide critical data for the National Healthcare Quality Report and the National Healthcare Disparities Report. Developmental work will also continue in FY 2006 as permitted within existing budget to facilitate the transition of the MEPS Computer Assisted Personal Interview System (CAPI) to a Windows®-based system.

Funds will also be allocated to the MEPS Insurance Component to maintain improvements in the availability of data to the States. In FY 2006, data on employer sponsored health insurance will be collected to support separate estimates for all 50 States and these funds would be used to enhance the tabulations we provide to the States to support their analysis of private, employer sponsored health insurance. The IC consists of two sub-components, the household sample and the list sample. In FY 2006, the MEPS Insurance Component employer sample linked to the household sample will not be conducted. In prior years, the data obtained, when linked back to the household respondent, allowed for analysis of individual behavior and choice made with respect to health care use and spending.

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