Reports the results of a study to identify whether and to what extent there are rural-urban differences in underinsured rates among the privately insured, and, where differences exist, to understand what characteristics of rural residents are related to their likelihood of being underinsured. Using the 2001 and 2001 Medical Expenditure Panel Survey (MEPS), the authors examined the annual out-of-pocket healthcare expenditures for U.S. residents under age 65 that were continuously insured by a private plan in either 2001 or 2002. Findings showed that, despite having private health insurance coverage, those who use medical services continue to pay for a substantial portion of their own healthcare costs, particularly those living in rural areas. The average rural non-adjacent individual paid for 39% of their care in 2001 or 2002, compared to 35% for rural adjacent and 32% for urban individuals. Additional findings showed that one out of eight non-adjacent residents is underinsured (12.4%), compared to 10% of rural adjacent and 7% of urban residents.