The Medical Expenditure Panel Survey: a national health information resource

This article describes the Medical Expenditure Panel Survey (MEPS), the third in a series of nationally representative surveys of medical care use and expenditures sponsored by the Agency for Health Care Policy and Research. The MEPS is designed to provide extensive data on the types of health care services American use, how frequently they use them, how much is paid for the services, and who pays for them. It also will provide information on the types and costs of private health insurance available to the U.S. population. The survey is unparalleled in its degree of detail, as well as its ability to link medical care use, payments, and health insurance coverage to specific survey respondents and their families. It allows analysts to examine how individual and family characteristics, including the characteristics of their health insurance, affect medical care use and spending. This article discusses each of the MEPS components, focusing on design enhancements that have been made since the survey was last conducted nearly a decade ago.

The concentration of health care expenditures, revisited

In two previous publications, we described the distribution of health care expenditures among the civilian, noninstitutionalized U.S. population, specifically in terms of the share of aggregate expenditures accounted for by the top spenders in the distribution. Our focus revealed considerably skewed distribution, with a relatively small proportion of the population accounting for a large share of expenditures. In this paper we update our previous tabulations (last computed using data more than a decade old) with new data from the 1996 Medical Expenditure Panel Survey (MEPS). Our findings show that the skewed concentration of health care expenditures has remained very stable; 5 percent of the population accounts for the majority of health expenditures.

Race/ethnicity and health insurance status: 1987 and 1996

Health insurance confers important private and social benefits. Disparities in coverage among the population remain an important public policy issue. The authors focus on the health insurance status of white, black, and Hispanic Americans in both 1987 and 1996 and identify gaps in minority health care coverage relative to white Americans. They also investigate the access of workers in these groups to employment-based health insurance. Identified are factors underlying changes in the insurance status of workers during the past decade in terms of changes in population characteristics and structural shifts underlying the demand for and supply of health insurance. The authors find that while coverage has declined for workers in most racial/ethnic groups, the experience of Hispanic males appears to be unique in that changes in their characteristics as well as structural shifts account for their decline in employment-related coverage. Structural shifts dominated the changes in coverage rates for other groups.

Cross-subsidization in the market for employment-related health insurance

This paper uses data from the 1987 National Medical Expenditure Survey to examine the nature of equilibrium in the market for employment-related health insurance. We examine coverage generosity, premiums, and insurance benefits net of expenditures on premiums, showing that despite a degree of market segmentation, there was a substantial amount of pooling of heterogeneous risks in 1987 among households with employment-related coverage. Our results are largely invariant to (i) firm size and (ii) whether or not employers offer a choice among plans. Our results suggest the need for caution concerning incremental reforms that would weaken the link between employment and insurance without substituting alternative institutions for the pooling of risks.

Health insurance choices in two-worker households: determinants of double coverage

Understanding how households make health insurance choices is of critical importance in evaluating issues of equity and efficiency in health care markets. We consider a largely neglected aspect of such decision making: the decision of families with two working spouses to obtain double coverage. Using data from the 1987 National Medical Expenditure Survey, we find that household decisions to obtain double coverage are especially sensitive to a couple's out-of-pocket premium costs. Our analysis also reveals that households with double coverage have more generous insurance, as reflected in their higher coverage rates for specific types of benefits. We also demonstrate that the presence of duplicate health benefits in double-covered households is not random, possibly reflecting a systematic attempt by working spouses to obtain more extensive coverage.

Children's health insurance coverage and family structure, 1977-1996

Using data from a series of nationally representative medical expenditure surveys, the authors document changes in children's health insurance coverage in a period of two decades. Overall, it is found that the proportion of children with private coverage declined, while the proportions publicly insured and uninsured increased. However, when the authors account for differences in family structure, they find striking disparities in children's insurance experiences. Contrary to overall trends, children in single-parent households made significant gains in private health insurance coverage after 1997 and experienced reductions in public insurance. Coincident with Medicaid expansions in the late 1980s, children in two-parent households experienced significant increases in public health insurance. It is found that the rise in the proportion of children who were uninsured in this period was largely a single-parent family phenomenon, and that parents' marital status, employment status, and family income are crucial factors associated with children's insurance status.

Implicit pooling of workers from large and small firms

Risk pools for small employers have become an integral part of proposals for national health care reform and have been implemented by a number of states. These explicit attempts to pool small employers are occurring at the same time that many small-firm employees obtain health insurance through implicit pooling arrangements as the dependent of a policyholder insured by a large firm. We use data from the 1987 National Medical Expenditure Survey to document the extent of implicit pooling arrangements, to examine whether small-firm employees and their dependents are adverse health risks, and to assess the cost implications of pooling small- and large-firm employees and dependents.

The concentration of health expenditures: an update

An earlier study tracing trends in health spending from 1928 to 1980 found health expenditures concentrated among the top 1 percent of those spending money for health care. In an update to that study, the authors found that that trend toward concentration has increased. In 1987 the tope 1 percent of spenders accounted for 30 percent of health spending, up from 26 percent in 1970 and 29 percent in 1980. In contrast, the bottom half of the population in terms of spending accounted for only 3 percent of total spending in 1987. The average expenditure for the top 1 percent of spenders in 1987 was $47,331. Nearly half of those top spenders in 1987 were elderly. Also, more than 16 percent were black, up from nearly 10 percent in 1980.

Insurance coverage and the demand for dental care. Results for non-aged white adults

The fraction of the U.S. population with private dental insurance coverage increased considerably during the past two decades. Experimental data from the Rand Health Insurance Study have revealed that dental insurance is an important determinant of demand. In this analysis, detailed health insurance data from the National Medical Care Expenditure Survey are used to study the effects of insurance on demand by a standard population of white adults aged 16 to 64. Results from this national probability sample are generally comparable to those from the Rand experimental data. Estimates indicate that the primary effects of dental insurance are to facilitate access to care and to increase dental expenditures. Results are consistent with the notion that first-dollar coverage exerts a greater effect on demand than insurance which requires payment of a deductible. Findings also suggest that insurance affects the mix of dental services received. Loss of dental benefits because of cost containment efforts will result in significant reductions in demand for dental services.