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Out-of-pocket Spending on Health Care Rises Sharply for American Families

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AHRQ News and Numbers

Release date: March 15, 2006

New statistics from the Department of Health and Human Services' Agency for Healthcare Research and Quality (AHRQ) underscore how rapidly rising health care costs are eating into the budgets of America's families. Data from AHRQ's Medical Panel Expenditure Survey (MEPS) show that the percentage of Americans under age 65 whose family-level out-of-pocket spending for health care and insurance exceeds $2,000 a year rose from 37.3 percent in 1996 to 43.1 percent in 2003—a 16 percent increase.

These figures have been adjusted for inflation, and health care expenditures for 1996 are expressed in constant 2003 dollars.

  • The ranks of those whose out-of-pocket spending for family health care exceeded $5,000 a year grew even more, rising from 9.1 percent of families in 1996 to 14.3 percent in 2003—a 57 percent increase.
  • There was also an increase in the proportion of non-elderly persons living in families whose out-of-pocket health expenses exceeded $10,000. Their numbers increased from 1.6 percent to 2.8 percent—a 75 percent rise.
  • When AHRQ's analysts looked at 2003—the latest year for which MEPS data on this topic are currently available—they found that non-elderly Americans with private, non-group coverage were the most likely to have high family-level, health-related spending, reflecting the high premiums and high deductibles common to such policies.
  • Nearly 78 percent of non-elderly Americans with private, non-group coverage had family-level out-of-pocket expenses that exceeded $2,000 a year, compared with 55.7 percent of those with private group insurance, 15.9 percent of the uninsured, and 14.0 percent of those with Medicaid or other public insurance.
  • The percentage of individuals with family-level spending in excess of $2,000 was higher among families consisting of two adult couples (62.0 percent) than among those families comprised of two parents and children (55.7 percent).
  • At the same time, 15.6 percent of single adults and 23.9 percent of those living in families consisting of single parents with children had out-of-pocket health expenditures exceeding $2,000 a year.

MEPS collects information from a nationally representative sample of U.S. households about health care use, expenses, access, health status, and quality. The survey does not include people in nursing homes, the military, or other institutions. This AHRQ News and Numbers summary includes trend data from MEPS data files and statistics from Out-of-Pocket Expenditures for Health Care and Insurance Premiums among the Nonelderly Population, 2003, MEPS Statistical Brief No. 121, available at [PDF Help]

For further information, or to speak with an AHRQ data expert, please contact Bob Isquith at or call (301) 427-1539.


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