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Lack of data has limited research into the high cost and ethical dilemmas associated with care of the dying elderly. This study is based on a five-year, person-specific file of Medicare and Medicaid use and cost data for residents of Monroe County, New York, over the age of 65. It examines and compares utilization and expenditure patterns of the Medicare-only and the Medicare-Medicaid (dually eligible) decedents in 1988. Examination of reimbursement for nonacute services, not covered by Medicare, reveals that services for the "older old" may be less costly immediately prior to death than for younger decedents. However, when expenses in the year prior to the year of death are also counted, services for the dually eligible, older old decedents appear to be neither more nor less costly than for younger decedents. Distribution of expenses does, however, vary considerably with age. The younger decedents, aged 65 to 74, use 55 percent of their medical resources on hospital care, paid for by Medicare; the older old use 26 percent for hospital services and pay 67 percent for supportive care, reimbursed by Medicaid. The study suggests that medical intervention associated with dying is utilized more often and at a higher cost by younger decedents.

This article examines transitions between the community and nursing homes among the private pay and the Medicaid eligible older (65+) persons. Discrete-time hazard functions were estimated to determine factors associated with the probability of these transitions. The analysis shows that recent hospitalizations for stroke, dementia, or hip fractures, while strongly predictive of nursing home admissions among the Medicaid elderly, were not significant (except for dementia) predictors for the private pay population. The results are of particular relevance in designing long-term care insurance, and more broadly, long-term care policy.

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