Out-of-Pocket Spending in the Last Five Years of Life

• Published in: Journal of general internal medicine : JGIM Vol. 28; no. 2; pp. 304 - 309
• Main Authors: Kelley, Amy S., McGarry, Kathleen, Fahle, Sean, Marshall, Samuel M., Du, Qingling, Skinner, Jonathan S.
• Format: Journal Article
• Language: English
• Published: New York Springer-Verlag 01-02-2013; Springer; Springer Nature B.V
• Subjects: Aged; Biological and medical sciences; Cause of Death; Ethics; Female; General aspects; Health care expenditures; Health Expenditures - statistics & numerical data; Health insurance; Health Services for the Aged - economics; Humans; Internal Medicine; Male; Marital Status; Medical sciences; Medicare; Medicare - economics; Medicine; Medicine & Public Health; Older people; Original Research; Public health. Hygiene; Public health. Hygiene-occupational medicine; Retrospective Studies; Socioeconomic Factors; Teaching. Deontology. Ethics. Legislation; Terminal Care - economics; United States; United States; North America; America; end-of-life; Medicare; out-of-pocket spending; healthcare expenses; Health insurance; Participation; Costs; Poverty; Health; Patient; End of life; Care; Medicine; Ethics; Payment; Health economy; Financing; Expenditure; out-of-pocket spending: healthcare expenses
• ISSN: 0884-8734; 1525-1497
• DOI: 10.1007/s11606-012-2199-x

ABSTRACT
BACKGROUND
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.
DESIGN
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.
PARTICIPANTS
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).
MAIN MEASURES
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.
RESULTS
Average out-of-pocket expenditures in the 5 years prior to death were $38,688 (95 % Confidence Interval $36,868, $40,508) for individuals, and $51,030 (95 % CI $47,649, $54,412) for couples in which one spouse dies. Spending was highly skewed, with the median and 90th percentile equal to $22,885 and $89,106, respectively, for individuals, and $39,759 and $94,823, respectively, for couples. Overall, 25 % of subjects’ expenditures exceeded baseline total household assets, and 43 % of subjects’ spending surpassed their non-housing assets. Among those survived by a spouse, 10 % exceeded total baseline assets and 24 % exceeded non-housing assets. By cause of death, average spending ranged from $31,069 for gastrointestinal disease to $66,155 for Alzheimer’s disease.
CONCLUSION
Despite Medicare coverage, elderly households face considerable financial risk from out-of-pocket healthcare expenses at the end of life. Disease-related differences in this risk complicate efforts to anticipate or plan for health-related expenditures in the last 5 years of life.