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Performance Budget Submission for Congressional Justification

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Fiscal Year 2003: Medical Expenditure Panel Survey (MEPS)


Purpose and Method of Operation
Funding History
Rationale for the FY 2003 Request

Purpose and Method of Operation

The objectives of AHRQ's Medical Expenditure Panel Survey (MEPs) are to provide public and private sector decisionmakers with the ability to:

  • Obtain timely national estimates of health care use and expenditures, private and public health insurance coverage, and the availability, costs and scope of private health insurance benefits among the U.S. population.
  • Analyze changes in behavior as a result of market forces or policy changes (and the interaction of both) on health care use, expenditures, and insurance coverage.
  • Obtain information on access to medical care, quality and satisfaction for the US population and for those with specific conditions, and for important sub-populations.
  • Develop cost and savings estimates of proposed changes in policy.
  • Identify the impact of changes in policy for key subgroups of the population (i.e., who benefits and who pays more).

These objectives are accomplished through the fielding of the Medical Expenditure Panel Survey (MEPS). MEPS is an interrelated series of surveys that replaces the National Medical Expenditure Survey (NMES). MEPS not only updates information that was last collected more than a decade ago in FY 1987, but also provides more timely health care expenditure data and new information on the quality of care received, at a lower cost per year of data, through the move to an ongoing data collection effort.

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AHRQ's Medical Expenditure Panel Survey collects detailed information regarding the use and payment for health care services from a nationally representative sample of Americans. Since 1977, AHRQ's expenditure surveys have been an important and unique resource for public and private sector decisionmakers. No other surveys supported by the Federal government or the private sector provide this level of detail regarding:

  • The health care services used by Americans at the household level and their associated expenditures (for families and individuals).
  • The cost, scope, and breadth of private health insurance coverage held by and available to the U.S. population.
  • The specific services purchased through out-of-pocket and/or third-party payments.

AHRQ fields a new MEPS panel each year. Two calendar years of information are collected from each household in a series of five rounds of data collection over a 2½-year period. These data are then linked with additional information collected from the respondents' medical providers, employers, and insurance providers. This series of data collection activities is repeated each year on a new sample of households, resulting in overlapping panels of survey data.

The data from earlier surveys (1977 and 1987) have quickly become a linchpin for the Nation's economic models and their projections of 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.

The public sector (e.g., Office of Management and Budget [OMB], Congressional Budget Office [CBO], Medicare Payment Advisory Commission [MedPAC], and Treasury Department), relies upon these data to evaluate:

  • Health reform policies.
  • The effect of tax code changes on health expenditures and tax revenue.
  • 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. In the past year, 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.

Based on the Department's Survey Integration Plan, MEPS linked its household survey and NCHS' National Health Interview Survey (NHIS), achieving savings in sample frame development and enhancements in analytic capacity. MEPS has also moved from a survey every 10 years to following a cohort of families on an ongoing basis. Doing so has four primary benefits:

  • It decreases the cost per year of data collected.
  • It provides more timely data on a continuous basis.
  • It creates for the first time the ability to assess changes over time.
  • It permits the correlation of these data with the National Health Accounts.

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The first MEPS data (from 1996) became available in April 1997, and key findings are summarized in the table below. 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.

MEPS Products and Significance

Product: MEPS Household Component

Significance: Full year household component has been released for 1996-98. Partial data has been released for 1999-2000.

Key Findings: 2000

  • In the first half of 2000, 16.1 percent of the U.S. civilian noninstitutionalized population were uninsured.
  • Among the U.S. civilian noninstitutionalized population under 65, more than a third of Hispanics (35.2 percent) and 23.2 percent of black non-Hispanics were uninsured during the first half of 2000, compared to only 14.2 percent of white non-Hispanics.
  • Among people under 65, Hispanics accounted for one fourth (24.9 percent) of the uninsured civilian noninstitutionalized population even though they represented only 12.9 percent of the overall population for this age.
  • Young adults aged 19-24 were the age group at the greatest risk of being uninsured, one-third (33.1 percent) of this group were lacking health insurance.

Key Findings: 1999

  • Among those under 65, 82.1 percent of Americans had public or private insurance coverage.
  • Among adults under 65, married persons were more likely to have health insurance.

Key Findings: 1998

  • Over one-half of elderly Americans were covered by private insurance; more than 4 in 10 held only public coverage (Medicare with or without Medicaid). This is represents a decline in private coverage from 1997 and an increase in public coverage.
  • Less than half of all Hispanic Americans and about half of black Americans were covered by private health insurance, compared to three quarters of whites.
  • Close to a third (31.8 percent) of Hispanics and a fifth of blacks were uninsured. In contrast, only 12 percent of whites were without insurance.

Key Findings: 1997

  • During the first half of 1997, nearly 30 percent of children under age 4, one in four children ages 4-6, and close to one in five children ages 7-12 had public health insurance coverage.
  • Young adults (19-24) were most likely to lack health insurance. Over a third of young adults (34.6 percent) were uninsured.
  • 78.7 percent of workers were covered by private health insurance, compared to half of individuals who were not employed.
  • Among all racial/ethnic groups, Hispanic males were the most likely to be uninsured; 36.9 percent lacked coverage.

Key Findings 1996

  • Inpatient hospital care accounts for nearly 4 of 10 dollars spent on health care; Prescribed medications account for about 13 percent of total expenditures.
  • About 86 percent of the US civilian population had health care expenses. While the average expense was $2,398 per capita, half of all people had expenses under $559.
  • 19.6 percent of privately insured children in single-parent families get health insurance coverage from a policyholder not residing in their household.
  • Almost 53 percent of children covered by Medicaid have at least one parent that works.
  • A greater percentage of workers are being offered health insurance by their employers in 1996 than in 1987; however, a smaller proportion is accepting insurance.
  • Nearly 18 percent of the population had no usual source of health care in 1996 and about 12 percent of families reported barriers to receiving needed health services.
  • In 1996, 77.5 percent of children with a usual source of health care had at least one ambulatory visit, compared to 43.3 percent those without a usual source of care.
  • Indicative of higher health care utilization rates during the last months of life, the average number of ambulatory visits for persons who died is about 2.5 higher than the rest of the population.
  • Only 43.2 percent of the population received dental care in 1996.

Product: MEPS Insurance Component

Significance: Data is available for 1996 through 1998.

Key Findings

  • The average health insurance premium in 1996 was $1,997 for single coverage and $4,953 for a family; in 1998 the single premium was $2,174 and the family premium was $5,590.
  • Nationwide, the employee contribution rate has not changed significantly from 1996 through 1998. Employers continue to share premium costs with their employees at the same level.
  • In every State, establishments in large firms were more likely to offer health insurance than those in small firms. Differences in offer rates between States are driven primarily by the small firms in those States.
  • Establishments in Alaska, Idaho, Wyoming, Arkansas, Mississippi, Oklahoma, Nebraska, Louisiana, New Mexico, and Texas were less likely to offer insurance to their employees.
  • Approximately 68 percent of establishments in the Nation that offer insurance, offer only one plan. Establishments in California and Hawaii are most likely to offer workers a choice of plans.
  • Conventional indemnity plans are most common in Wyoming, Alaska and Idaho.
  • 21.8 percent of all establishments that offered health insurance offered their employees a choice of plans.
  • Smaller firms are less likely to offer health insurance to their employees, but there are significant variations from State to State.
  • Data is now used in calculation of Gross Domestic Product.

Product: MEPS Resource Center

Significance: Beginning in 2000, MEPS data not available for broad public distribution are available to researchers and others with approved projects on site at AHRQ. Data are used in a tightly controlled, supervised environment. Permits more use of the data by a broad range of users.

Product: MEPS Workshops

Significance: Since 1999, MEPS staff have provided training in how to use this data to nearly 300 researchers and policymakers. These sessions have ranged from 3-hour seminar style presentations to 2-day hands-on practical learning situations. While most of these seminars have been in the Washington DC metro area, we have also conducted workshops in Georgia, Massachusetts, California, and Illinois.

Funding History

The funding summary for MEPS follows.

Funding History 2001
2003 Request
2002 Appropriation
Current Law
Budget Authority $0 $0 $0 $0
PHS Evaluation ($40,850,000) ($48,500,000) ($53,300,000) +(4,800,000)
Accrual Costs
Budget Authority $0 $0 $0 $0
PHS Evaluation ($0) ($0) ($0) ($0)
Proposed Law
Budget Authority $0 $0 $0 $0
PHS Evaluation ($40,850,000) ($48,500,000) ($53,300,000) +($4,800,000)
Full Time Equivalents NA NA NA NA

Year Budget
Evaluation Funds
1999 Actual $29,300,000 $29,300,000
2000 Actual $36,000,000 $36,000,000
2001 Actual $40,850,000 $40,850,000
2002 Current Estimate $48,500,000 $48,500,000
2003 Request $53,300,000 $53,300,000

Rationale for the FY 2003 Request

The FY 2003 request for the Medical Expenditure Panel Survey (MEPS) totals $53,300,000 in PHS evaluation funds. The total reflects an increase of $4,800,000 from the FY 2002 level of $48,500,000. The increase consists of:

  • Continuation Costs from Prior Year Enhancements:     +$3,800,000.
  • Enhancements to the MEPS Insurance Component:    +$1,000,000.

Continuation Costs

The FY 2003 request for MEPS includes continuing costs of $3,800,000 for FY 2002 enhancements to the sample size and content of the MEPS Household and Medical Provider Survey necessary to satisfy the congressional mandate to submit an annual report on national trends in health care quality. It also covers continuing costs for FY 2002 MEPS sample size and content enhancements necessary to prepare an annual report on health care disparities. The MEPS Household Component sample size increased from 13,500 households in 2001 with a full calendar year information to 15,000 households in 2002 for an 8-month period. The funding in FY 2003 reflects the first full calendar year of data collection at the 15,000 household level.

The funding in FY 2003 also reflects a sample increase in the sample size of the MEPS Medical Provider Survey associated with the 2002 MEPS Household Sample (2,000 additional office-based physicians, 1,000 additional hospital-identified physicians and 1,000 additional pharmacies to obtain health care information on MEPS respondents).

The increase in sample size for the MEPS permits more focused analyses of the quality of care received by special populations due to significant improvements in the precision of survey estimates. This modification in concert with the sample enhancements initiated in 2001 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 permit the continuation of an oversample in MEPS of Asian and Pacific Islanders and individuals with incomes less than 200 percent 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. The funds will also cover additional improvements in the MEPS computer-assisted interview programs to support the National Quality Report and the National Disparities Report.

In FY 2003, data collection will be ongoing for the MEPS Household Survey, the MEPS Medical Provider Survey, and the MEPS Insurance Component, which consists of a sample of establishments linked to the MEPS Household sample and a separate national employer health insurance survey. More specifically, in-person interviews will be conducted with more than 15,000 families to obtain calendar year 2003 health care data. The Medical Provider Survey will consist of interviews with more than 4,000 facilities, 22,000 office-based providers, 11,000 hospital-identified physicians, 800 home health providers and 9,000 pharmacies. In addition, the MEPS Insurance Component will consist of interviews with more than 40,000 employers.

New Enhancements

An additional $1.0 million will be allocated for enhancements to the MEPS Insurance Component both in terms of sample size and improvements in the collection of information from employers about health insurance offerings and costs for their employees. The funds will support a 50 percent sample increase in the set of establishments associated with the MEPS household sample and data collection improvements to improve survey response rates. The enhancements will also permit more detailed analyses for population subgroups that include Asian and Pacific Islanders and individuals with incomes less than 200 percent of the poverty level.

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Current as of February 2002


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