Variations by age

In 2011, an average of $703 was paid out of pocket for health care among people with some health care expenses¹ (Figure 1). This average ranged from $283 for children under age 18 to $1,215 for the elderly age 65 and older. The overall average ($703) was substantially larger than the overall median ($237) because a small proportion of people had extremely large out-of-pocket expenses. Median out-of-pocket expenses were also substantially lower than averages across all age groups.

Figure 1

Average and median out-of-pocket payments for people with health care expenses*, by age, 2011.

In 2011, 12.1 percent of people paid nothing out of pocket toward their health care expenses (Figure 2). However, this proportion decreased with age, ranging from 32.5 percent for children under 18 to 2.5 percent for people age 65 and older. Conversely, the percentage of people with high levels of out-of-pocket expenses increased with age. Overall, 19.1 percent of people had out-of-pocket expenses greater than $1,000, and 8.2 percent had expenses greater than $2,000, but the percentage with greater than $1,000 in out-of-pocket expenses ranged from 6.0 percent for children under age 18 to 34.1 percent for the elderly age 65 and older. Further, 14.4 percent of people age 65 and older had expenses greater than $2,000 versus only 8.5 percent for younger adults and 3.1 percent for children under 18.

Figure 2

Distribution of out-of-pocket payment amounts for people with health care expenses*, by age, 2011.

Among people with health care expenses in 2011, an average of 28.2 percent was paid out of pocket, while the median was about 10 percentage points lower (Figure 3). Both the average and median percentages paid out of pocket were lowest for children and highest for adults ages 18-64.

Figure 3

Average and median percentage of health care expenses paid out of pocket, by age, 2011.

Variations by insurance coverage

Average annual out-of-pocket expenses varied by type of insurance coverage among those with some health care expenses² (Figure 4). For example, the average of $253 for people under age 65 with public insurance (i.e., primarily Medicaid) was notably smaller than for those under 65 who had private coverage ($682) or were uninsured ($725). Among people age 65 and older, average out-of-pocket expenses for those with Medicare and supplemental public coverage ($605) were markedly lower than for those with Medicare only ($1,177) or Medicare and supplemental private coverage ($1,362).

Figure 4

Average out-of-pocket payments for people with health care expenses*, by insurance coverage, 2011.

Nearly half (46.2 percent) of people under 65 with public insurance coverage made no out-of-pocket payments for their health care versus only 6.5 percent of their privately insured and 6.4 percent of their uninsured counterparts (Figure 5). Those age 65 and older with supplemental public coverage to Medicare were also more likely than their elderly counterparts to have no out-of-pocket expenses.

Figure 5

Distribution of out-of-pocket payment amounts for people with health care expenses*, by insurance coverage, 2011.

Uninsured people under age 65 had by far the highest proportion of their health expenses paid out of pocket (Figure 6), with an average of nearly two-thirds of their health care expenses paid out of pocket³. In contrast, the average proportions paid out of pocket for people under age 65 with public coverage and for the elderly with Medicare and other public coverage were only 9.1 percent and 10.8 percent, respectively.

Figure 6

Average percentage of health care expenses paid out of pocket, by insurance coverage, 2011.

The estimates in this Statistical Brief are based upon data from the MEPS HC-147: 2011 Full Year Consolidated Data File.

Out-of-pocket expenses

MEPS total expenses include payments from all sources (including insurance and other miscellaneous third-party sources) to hospitals, physicians, other health care providers (including dental care), and pharmacies for services reported by respondents in the MEPS-HC. Out-of-pocket expenses comprise the portion of total payments made by individuals and families for services received during the year. For this Brief they do not include out-of-pocket payments made for health insurance premiums.

Health insurance status

Individuals under age 65 were classified in the following three insurance categories based on household responses to health insurance status questions:

• 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) were classified as having private insurance. 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 were considered to have public coverage only if they met both of the following criteria: 1) they were not covered by private insurance at any time during the year, 2) they were covered by any of the following public programs at any point during the year: Medicare, Medicaid, or other public hospital/physician coverage.
• Uninsured: The uninsured were defined as people not covered by private hospital/physician insurance, Medicare, TRICARE, Medicaid, or other public hospital/physician programs at any time during the entire year or period of eligibility for the survey.

Individuals age 65 and older were classified into the following three insurance categories based on household responses to health insurance status questions:

• Medicare and private insurance: This category includes people classified as Medicare beneficiaries and covered by Medicare and a supplementary private policy.
• Medicare and other public insurance: This category includes people classified as Medicare beneficiaries who met both of the following criteria: 1) They were not covered by private insurance at any point during the year, 2) They were covered by one of the following public programs at any point during the year: Medicaid, other public hospital/physician coverage.
• Medicare only: This category includes people classified as Medicare beneficiaries but not classified as Medicare and private insurance or as Medicare and other public insurance. This group includes people who were enrolled in Medicare HMOs and people who had Medicare fee-for-service coverage only.

MEPS-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 U.S. 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/.

Machlin, S. and Carper, K. Out-of-Pocket Health Care Expenses by Age and Insurance Coverage, United States, 2011. Statistical Brief #441. June 2014. Agency for Healthcare Research and Quality, Rockville, MD. http://meps.ahrq.gov/mepsweb/data_files/publications/st441/stat441.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 email us at MEPSProjectDirector@ahrq.hhs.gov or send a letter to the address below: