In today’s Academic Minute, Dr. Amy Kelley of Mount Sinai School of Medicine examines the average Medicare recipient’s medical expenses during the last five years of life.
Amy Kelley is an assistant professor of geriatrics and palliative medicine at Mount Sinai School of Medicine in New York City. Her research focuses on medical decision making for older adults with serious medical illness. She received her medical degree from Weill Cornell Medical College.
Dr. Amy Kelley – End-of-Life Healthcare Expenses
A key objective of the Medicare program was to reduce risk of personal financial catastrophe due to out-of-pocket healthcare expenses. Healthcare cost have risen dramatically since the Medicare program was started in 1965, particularly near the end of life, and yet little is known about the financial risks Medicare beneficiaries face due to out-of-pocket costs.
We used information from the national Health and Retirement Study to investigate the amount of out-of-pocket healthcare costs Medicare beneficiaries experienced over the last 5-years of life. We identified more than 3200 Medicare beneficiaries in this study who had died between 2002 and 2008. Scaled to 2008 dollars, we found that the average out-of-pocket expenses in the last 5-years of life were over $38,000.
One quarter of subjects spent more than their baseline total household assets and 43% spent more than their non-housing assets. Among those survived by a spouse, 10% had spending greater than their total assets and nearly one-in-four exceeded their non-housing assets. We also found that spending varied with the person’s illness. Those with dementia or Alzheimer’s disease spent the most, averaging more than $66,000, or more than twice that of patients with gastrointestinal disease or cancer, who spent an average of $31,000.
The Medicare program provides a significant amount of health care coverage to people over 65, but it does not cover co-pays, deductibles, homecare services, or most nursing home care- and these expenses can add up leading to considerable financial risk from out-of-pocket healthcare expenses. Disease-related differences in this risk complicate efforts to anticipate or plan for health-related costs. We hope that these data may help individuals set realistic expectations for end-of-life health care costs, and assist government officials as they evaluate proposals for Medicare reform.