Out of pocket charges for health care during the last five years of life costs 25 percent of Medicare recipients all that they have, including their homes, according to a new study from the Mount Sinai School of Medicine. Researchers at the school found that another 43 percent spent more than their total assets, after subtracting the value of their homes.
“Medicare provides a significant amount of health care coverage to people over 65, but it does not cover co-payments, deductibles, homecare services, or non-rehabilitative nursing home care,” said the study’s lead author, Amy S. Kelley, M.D., assistant professor of Geriatrics and Palliative Medicine at Mount Sinai School of Medicine, in a press release. “I think a lot of people will be surprised by how high these out-of-pocket costs are in the last years of life.”
On average, people with dementia or Alzheimer’s disease paid the most, $66,155, about twice what those with cancer or gastrointestinal illnesses spent, $31,069. As dementia progresses, people become unable to live independently, and need more specialized, round-the-clock care than an ordinary assisted living facility or a relative can provide.
“It raises a couple of concerns for me as a doctor, a taxpayer, and an adult child of older parents,” said Dr. Kelley in a phone interview. “I think people should plan their savings” to prepare for potentially high health care costs. “As taxpayers we need to consider that old people already have a lot of expenses,” she said.
“It raises a couple of concerns for me as a doctor, a taxpayer, and an adult child of older parents.”
—Amy S. Kelley, M.D., assistant professor of Geriatrics and Palliative Medicine, Mount Sinai School of Medicine
If an elder has the misfortune to exhaust all of his assets paying for palliative care for a dementing and disabling illness, then Medicaid will provide a last safety net, taking over nursing home bills. Kelley said, “I think people don’t realize how much Medicaid does for old people; we need to keep an eye on Medicaid.”
For seniors who do use up all their assets paying out of pocket, and then rely on Medicaid, “there’s a full spectrum of quality out there,” according to Kelley.
Congress has considered finding a way to add insurance coverage for home care and non-rehabilitative nursing home care to Medicare, but they decided it was too expensive.
Kelley and her colleagues used a “rich longitudinal study,” a biennial survey of 26,000 Americans over the age of 50, called the Health and Retirement Study, supported by the National Institute on Aging and the Social Security Administration.
She said that a lot is known about Medicare, how it works and what it covers, but no one had looked systematically at out of pocket expenses.
“I work with people who have generous coverage, but people are often surprised at how those things can build up, from glasses to hearing aids to home health care,” said Kelley.
The report was published online in the current issue of the Journal of General Internal Medicine. The National Institute on Aging funded it.
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