Rural-Urban Differences in Out-of-Pocket Prescription Drug Spending

Research center:
Project funded:
September 2019
Anticipated completion date:
April 2024

The percentage of healthcare costs borne directly by patients has steadily increased in the past decade. For example, in 2017, 10.5% of all healthcare spending was paid out-of-pocket. The proportion of out-of-pocket spending was even higher for prescription drugs, with 14% of all costs borne directly by the consumer.

Higher out-of-pocket costs for prescription drugs may affect medication adherence, lead to poorer health outcomes and potentially increase other healthcare costs. While we know that out-of-pockets costs for prescription drugs are of concern, there is scant literature on rural residents' cost sharing for prescription drugs.

This study will use the Medical Expenditure Panel Survey to examine out-of-pocket spending on prescription medication from 2014-2017. Specifically, we propose to analyze total spending and out-of-pocket spending for rural versus urban residents. We will identify the percentage of prescription drug spending that is paid out-of-pocket by rural and urban residents—across all drugs and within certain drug classes of interest (e.g., medications for diabetes, behavioral health conditions, asthma, and cancer). We will also examine how rural and urban out-of-pocket spending for prescription drugs differ based on health insurance coverage and other socioeconomic variables.