American seniors are fighting an ongoing battle as they try to cope with medical expenses on top of an already high cost of living. A recently published study has revealed a staggering peek into the financial status of older people as they reach the final five years of life: it’s now common for American Medicare patients to die with high medical debt.
According to researchers at Mount Sinai School of Medicine, nearly half of U.S. Medicare recipients pay more than the value of their assets, excluding primary homes, on out-of-pocket medical care during their final five years of life. Overall, 25 percent of Medicare recipients end up paying more than their total assets, including their homes.
Medicare was signed into law in 1965 by President Lyndon Johnson in an effort to ensure no older American would be denied medical treatment. The program planned to make certain that illness would not eat away at savings earmarked for retirement or devastate a younger generation trying to care for parents and grandparents.
Study Reveals Financial Shortcomings
Dr. Amy S. Kelley, Assistant Professor of Geriatrics and Palliative Medicine at Mount Sinai School of Medicine, led a study on the personal financial effects of Medicare and found that the program only goes so far. While it does provide substantial health care coverage to people 65 years and older, she pointed out it does not take care of expenses such as pricey deductibles, co-payments, homecare services and non-rehabilitative nursing home care.
Kelley’s study, which compared out-of-pocket expenses with total household assets, relied on survey information provided by more than 3,200 Medicare recipients in their final five years of life. The study concluded that typical spending for Medicare recipients was more than $38,000, with more than 75 percent of patients paying at least $10,000 out of pocket. The top 25 percent paid out an average of nearly $102,000 each.
Factors Affecting Cost
Research showed that marital status played a factor in the levels of out-of-pocket spending. Single Medicare patients used all their remaining funds on medical care more often that those who were married.
Cause of death also affected costs. Those with liver or gastrointestinal disease paid out a little more than $31,000, for example, while patients suffering from Alzheimer’s disease typically spent more than $66,000. Such vast differences can make financial planning very difficult.
As American health care costs skyrocket and retirement funds dwindle, the future looks bleak for aging Americans.
The study’s authors warned that costs not covered by Medicare are likely to continue growing. Kelley speculated that future generations may face a weakened financial future as they are required to deplete their savings in the event of personal illness or death of a spouse.