• Health care is expensive, even for those on Medicare

    We like to think that Medicare is an incredibly comprehensive health care insurance program that protects seniors from financial hardship due to health related issues. But what are out-of-pocket costs for the elderly? A new study in JGIM examined just that:


    A key objective of the Medicare program is to reduce risk of financial catastrophe due to out-of-pocket healthcare expenditures. Yet little is known about cumulative financial risks arising from out-of-pocket healthcare expenditures faced by older adults, particularly near the end of life.


    Using the nationally representative Health and Retirement Study (HRS) cohort, we conducted retrospective analyses of Medicare beneficiaries’ total out-of-pocket healthcare expenditures over the last 5 years of life.


    We identified HRS decedents between 2002 and 2008; defined a 5 year study period using each subject’s date of death; and excluded those without Medicare coverage at the beginning of this period (n = 3,209).


    We examined total out-of-pocket healthcare expenditures in the last 5 years of life and expenditures as a percentage of baseline household assets. We then stratified results by marital status and cause of death. All measurements were adjusted for inflation to 2008 US dollars.

    We all know that end-of-life care is expensive. This study looked at the last 5 years of people’s lives on Medicare, specifically at out-of-pocket spending. The average amount spent in those years was $38,688 for individuals, and more than $51,000 if the subject was part of a couple. However, there was a skew in the data. The median amounts of spending were $22,885 for individuals and $39,759. This means that a number of people spent a whole lot of money. In fact, ten percent of both individuals and spouses spent upwards of $90,000 on health care in the last five years of life.

    That’s out-of-pocket. That’s on Medicare.

    For individuals, the amount spent was more than baseline household assets for one in four people. More than two in five  individuals spent more than the value of their non-housing assets.

    Health care is amazingly expensive in the United States. There are days I don’t know what else to say.


    • >>Health care is amazingly expensive in the United States. There are days I don’t know what else to say.>>

      That’s the real problem. Complaining about Medicare expenses entirely misses the point. We have an incredibly inefficient healthcare sector in the US (which is another way of saying amazingly expensive).

      Shifting costs from the government to seniors won’t help (it will make things worse according to the CBO and other analysts). We need to bring down healthcare costs.

      All those clever budget games also miss the point. Decrease healthcare spending to the levels of the second most expensive country and our budget issues evaporate.

      Instead, we fiddle around the edges at tremendous costs to national well being and finances.

    • These out of pocket amounts are after the different types of Medi-Gap policies have paid their part?

    • By biggest complaint on the PPACA is it does little if anything to lower costs (mainly thanks the lobbyist groups). Yet no other plan does anything to address costs either. It is all a shell game/ smoke and mirrors. Until there is a fundamental change in the US system from disease diagnosis and treatment to preventions the status quo will remain.

    • As an MD who sees a lot of hospitalized, chronically ill or dying patients, I’m always struck by different notions of advocacy. Is it my job as a physician to advocate for the medical treatment plan my patient/family wants, even if I think it’s going to be an expensive, painful flail? Most (but perhaps not all) physicians would say yes, at least if there was genuine informed consent. But is it my job to advocate for a patient to stay in the hospital, even if they don’t really need to be? To justify the need for a skilled nursing facility stay, so they don’t have to drain their assets paying for custodial care?

      I don’t honestly know. I’ve done it both ways, and truly have mixed feelings. But I struggle when the notion of patient advocacy requires I work to offload what should be private health care costs onto the government, or even private insurance. I don’t mean to sound too confrontational, but isn’t that kind of the nature of the beast? In theory, you saved for a rainy day. Well, it’s raining. This is especially true for a Medicare population, all of whom will presumably die, most of them after a prolonged period of chronic illness and dependence. Is it the job of Medicare, or the physician, to preserve their childrens’ inheritance?

      • Let’s talk about “Death Panels”. Even the proposal to have doctors and patients talk about end of life medical decisions morphed into “Government Killing Granny”. Until the patient, family and medical advisers have a frank discussion about the patient’s wishes, DNRs, and treatment options, there is little hope of reducing the over-treatment of terminally-ill seniors. Instead, the doctor is not working with all the facts and the family are emotionally overwhelmed as the loss of a loved one looms. The out-of-pocket financial shock just adds to the loss.

        • My worry is that there are two ways to handle death panels. One is to create an independent board to make value-based judgments on care provision. The other is to force people to pay for care beyond a certain cost or time threshold, and withhold it in the absence of payment. I do not believe we have the political will to take either of these approaches.

          As someone who does this sort of thing for a living, I worry that the combination of American avarice and extreme fear of death will always thwart the impact of good advance care planning. At some point the incentives for everyone — doctors, patients, families, payors, providers — simply need to change.

          • Let me explain where I’m coming from with the most hated of comments, a personal anecdote! After my mother was diagnosed with a recurrence of the cancer she had battled a few years earlier, she said to me that she had fought the good fight once already and didn’t want to go through the awful side-effects from another round of cancer treatment. Despite her communicating her wishes to my father and to her doctor, my father ran around trying to find emergency interventions rather than spending the time with my mother as she wished.

            You said: ” …I worry that the combination of American avarice and extreme fear of death will always thwart the impact of good advance care planning.” The other factor I would add is an extreme unwillingness to stop fighting; accepting the imminent death of a loved one is cowardice, an admission of defeat. It seems to me a solution is imperative as we Baby Boomers march en masse to our ultimate destiny! (And being the Selfish Generation, we won’t go quietly.)

            BTW, being Canadian, my parents’ actions were not affected by financial considerations (or avarice on the part of doctors or hospitals) – no co-pays, no annual or lifetime limits, in short,, no out-of-pocket costs.

      • I’ve thought the same thing at times, @SAL. As a 30 year old child of baby boomers I read the statistics that my parents will likely have to spend most of their savings on medical care and shrug. **That is what the savings are for.**

        I hope they have enough for a happy and comfortable old age but I certainly don’t expect them to leave me a monetary inheritance. They gave me a secure childhood, strong values, and a good education. I have no “right” to any inheritance beyond that.