About 25 percent of Medicare recipients die penniless because of the cost of health care during the last five years of their lives, according to a recent survey.
"The bottom line is that Medicare covers quite a lot, but there is also a lot of things it doesn't cover and facing that is important for one's own retirement planning," says Dr. Amy Kelley, a practicing physician and an assistant professor of geriatrics and palliative medicine at Mount Sinai School of Medicine in New York.
Kelley researched this topic and wrote about it for the Journal of General Internal Medicine, using data from the Health and Retirement Study, a biennial survey of 26,000 Americans over the age of 50. The survey is supported by the National Institute on Aging and the Social Security Administration.
The study found that the average Medicare recipient during the last five years of his life spent $38,688 beyond what he got from Medicare plus private insurance, Medigap, long-term care insurance or other programs that provide money to pay for health care or other health-related expenses. Some 43 percent of Medicare recipients spent more than their total assets after subtracting the value of their primary residences.
Patients with Alzheimer's or other forms of dementia spent the most -- an average of $66,155, about twice the $31,069 average amount that people with gastrointestinal disease or cancer spent.
Having money available to spend just meant that Medicare recipients spent more, with people in the top 25 percent of income brackets spending an average of $101,791.
Kelley, who sees lots of her patients struggle with tough decisions caused by the expenses of end-of-life care, advises, "People planning for retirement need to recognize that spending can be quite high and unpredictable. Consider your own health status and your family history. Then, talk to your doctor and your financial adviser before you formulate a plan."