Photo: Flickr / Borya
Most retirees know they’ll spend more on health care as they age, however, a new study suggests the last five years of life are doomed to put the biggest strain on their wallet and Medicare won’t be enough to cover it. A report in the Journal of General Internal Medicine surveyed 3,209 Medicare beneficiaries between 2002 and 2008 and found they spent more out-of-pocket in the five years prior to death that at any other point in their lives.
Factoring out-of-pocket co-payments and deductibles, researchers found 25 per cent of seniors spend more on home care, long-term nursing and assisted living combined than they do on non-housing assets. (via Health News).
And in examining out-of-pocket costs spent annually, they saw individuals spent $38,688 on average, while couples shelled out $51,030 when one of the spouses died. 10 per cent of Medicare beneficiaries spent at least $89,000 out-of-pocket, while 5 per cent spent more than $139,000. Finally, eleven per cent of single and 9 per cent of married households spend more than $100,000, while 75 per cent spent more than $10,000.
“Despite Medicare coverage, elderly households face considerable financial risk from out-of-pocket health care expenses at the end of life,” concluded the authors.
According to the Bureau of labour Statistics, the average consumer’s annual cost of health care is already $3,157, a figure that’s only projected to rise as more doctors join the profession and general costs spiral out of control, including doctor’s visits, defensive medicine and prescriptions.
Equally troubling is the fact that most boomers haven’t prepared for health care costs in retirement. Choosing to focus instead on housing, savings and food, many have lost sight of what Medicare will and won’t cover.
Said study author Dr. Amy Kelly, assistant professor of geriatrics and palliative medicine at Mount Sinai School of Medicine in New York City: “I see it every day. Individuals facing retirement may not be aware of what Medicare doesn’t cover.”
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