Health status and the cost of expanding insurance coverage

This paper uses data on health spending and health status from the Medical Expenditure Panel Survey (MEPS) to estimate the differences in health spend ing across different types of insurance and across incomes that are attribu table solely to health status differences. The results show that the uninsu red are less costly than those on Medicaid, based on health status alone, b ut are more costly than those with employer-sponsored insurance. Adults and children with private nongroup coverage are also less expensive than avera ge, because of better-than-average health. Finally, the data show that expe nditures fall (health status improves) with income, regardless of type of c overage.