Out-of-Pocket Health Expenditures

MEPS Statistical Brief No. 450

Estimates of health care expenses for the U.S. civilian noninstitutionalized (community) population are critical to policymakers and others concerned with access to medical care and the cost and sources of payment for that care. In 2012, health care expenses among the U.S. community population totaled $1.35 trillion. Medical care expenses, however, are highly concentrated among a relatively small proportion of individuals in the community population.

Differentials in the Concentration in Out-of-Pocket Health Expenditures across Population Subgroups in the U.S., a statistical brief from the Household Component of the Medical Expenditure Panel Survey, provides detailed estimates of the concentration in the level of out-of-pocket health care expenditures for the nation, and further distinguished by specific population subgroups. Studies that examine the concentration of health care expenditures, their magnitude, and their respective differentials among specific population subgroups are essential to help discern the factors most likely to drive health care spending and the characteristics of the individuals who incur them. The data are particularly well suited for measuring the population's distribution of health care expenditures.

Highlights

  • In 2012, the top 1 percent ranked by their out-of-pocket health care expenses accounted for 20.5 percent of total out-of-pocket health care expenditures with an annual mean out-of-pocket expenditure of $12,500. Overall, the top 50 percent of the population ranked by their out-of-pocket expenditures accounted for 97.8 percent of overall out-of-pocket health care expenditures while the lower 50 percent accounted for only 2.2 percent of the total.
  • In 2012, 7.2 percent of the population (22.5 million individuals) had out-of-pocket expenditures for medical care that were equal to or greater than $2,000. Nearly 4.8 million individuals (1.5 percent) paid $5,000 or more out of pocket for their medical care. When considering higher spending thresholds, approximately 1.3 million individuals (0.4 percent) incurred out-of-pocket expenditures of at least $10,000.
  • In 2012, only 3.9 percent of medical expenditures for inpatient hospitalizations were paid out of pocket. Alternatively, 12.3 percent of ambulatory care expenditures, 19.2 percent of prescribed medical expenditures, and 48.5 percent of dental expenditures were paid out of pocket.
  • Children under the age of 18 were characterized by substantially greater concentrated levels of out-of-pocket health care spending relative to their older counterparts. Alternatively, the elderly had the highest mean levels of out-of-pocket health care expenditures relative to younger population subgroups at the top quantiles of the expenditure distribution.
  • Non-Hispanic whites and other races had the highest mean levels of out-of-pocket health care expenditures at the top quantiles compared with other racial/ethnic groups.
  • The top 5 percent of the publicly insured population under age 65 ranked by their health care expenses accounted for 68.1 percent of the out-of-pocket health care expenditures incurred by this subpopulation with an annual mean of $2,682. Individuals with public insurance had the most concentrated levels of out-of-pocket health care expenditures and the lowest annual mean out-of-pocket expenses.

Select to access Differentials in the Concentration in Out-of-Pocket Health Expenditures across Population Subgroups in the U.S.

Page last reviewed October 2014
Internet Citation: Out-of-Pocket Health Expenditures: MEPS Statistical Brief No. 450. October 2014. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/meps1.html