The Risk of Out-of-Pocket Health Care Expenditure at the End of Life

Marshall, Samuel; McGarry, Kathleen; Skinner, Jonathan

doi:10.7208/chicago/9780226903385.003.0004

Cited by 26 publications

(23 citation statements)

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“…In fact, their results suggest that the HRS measures understate non-drug, non-nursing-home spending relative to the MCBS. Consistent with the results from these studies, Marshall, McGarry and Skinner (2011) conclude that aggregate estimates produced using the 2004 HRS data are very close to aggregate estimates based on the National Medical Expenditure Accounts (NMEA).…”

Section: Data Validationsupporting

confidence: 76%

Out‐of‐Pocket Medical Expenditures in the United States: Evidence from the Health and Retirement Study

2016

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We use data from the Health and Retirement Study (HRS) to document the distribution of out‐of‐pocket medical spending among individuals aged 55 and over in the US. The HRS data permit us to examine out‐of‐pocket spending close to the end of life and to analyse the components of spending in more detail than has been done in previous studies. We find that spending risk rises sharply at older ages and near the end of life. While the median individual spent $6,328 out‐of‐pocket in the last year of life, 5 per cent were reported to have spent over $62,040. Our results also indicate that out‐of‐pocket spending is highly concentrated, with the top 10 per cent of spenders accounting for 42 per cent of all spending, and persistent, even over periods spanning many years. Finally, while certain categories of spending are very responsive to income and wealth, we do not find overall spending to be highly concentrated along these dimensions. Viewed within the international context, our results suggest that the fraction of households facing very high out‐of‐pocket spending is substantially greater in the US than in other developed countries.

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Section: Data Validationsupporting

confidence: 76%

Out‐of‐Pocket Medical Expenditures in the United States: Evidence from the Health and Retirement Study

2016

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“…Relative to medical spending for all the elderly (see Table 4), the government picks up a larger share of medical spending amongst those near death, most notably through Medicare. Out-of-pocket expenses in the last year of life are $6,500, somewhat lower than found by French et al (2006) or Marshall, McGarry and Skinner (2011). Uncollected liabilities are $380, while $3,180 is covered by private insurance.…”

Section: Figurementioning

confidence: 54%

“…Other studies includeLubitz and Riley (1993),Scitovsky (1994),Levinsky et al (2001),Riley and Lubitz (2010) andMarshall, McGarry and Skinner (2011).27 Miniño et al, 2011. C 2016 The Authors.…”

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confidence: 99%

Medical Spending of the US Elderly

et al. 2016

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We use data from the Medicare Current Beneficiary Survey (MCBS) to document the medical spending of Americans aged 65 and older. We find that medical expenses more than double between ages 70 and 90 and that they are very concentrated: the top 10 per cent of all spenders are responsible for 52 per cent of medical spending in a given year. In addition, those currently * Submitted June 2015. 718Fiscal Studies experiencing either very low or very high medical expenses are likely to find themselves in the same position in the future. We also find that the poor consume more medical goods and services than the rich and have a much larger share of their expenses covered by the government. Overall, the government pays for over 65 per cent of the elderly's medical expenses. Despite this, the expenses that remain after government transfers are even more concentrated among a small group of people. Thus, government health insurance, while potentially very valuable, is far from complete. Finally, while medical expenses before death can be large, on average they constitute only a small fraction of total spending, both in the aggregate and over the life cycle. Hence, medical expenses before death do not appear to be an important driver of the high and increasing medical spending found in the US. Policy pointsr Those at the top of the income distribution in the US consume 71 per cent as much health care resources as those at the bottom of the distribution per year.r Those in the last calendar year of life are responsible for 4.9 per cent of total spending. In the last 12 months of life, average medical spending is $59,000, accounting for 16.8 per cent of spending at ages 65 and over and for 6.7 per cent of spending at all ages. Medical spending in the three years before death accounts for 13.4 per cent of aggregate medical spending. r Total spending is on average about $1,100 per year more for women than for men, due to higher expenditures on nursing homes for women.r The financing of health care varies dramatically by income. In the bottom income quintile, Medicare pays $9,500 a year and Medicaid $3,900, while private insurance covers just $900 and out-of-pocket spending is $2,500. In the top income quintile, Medicare pays $6,300 and Medicaid only $300, while private insurance pays $2,400 and out-of-pocket spending is $3,000.r Medical spending is very persistent over time, with those in the top quintile of spending in one year having a 54 per cent chance of being in the top quintile in the next year and a 48 per cent chance of being in the top quintile in two years' time.

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“…Marshall, McGarry, and Skinner (2010) estimated that annual out-of-pocket health costs were $11,618 on average for older Americans in the last year of life. These costs varied by the number of chronic conditions, type of diseases, severity, and combination of diseases in later years.…”

Section: Health and Wealth In Later Yearsmentioning

confidence: 99%

Sequential Patterns of Health Conditions and Financial Outcomes in Late Life: Evidence From the Health and Retirement Study

Kim

Shin

Zurlo

2015

Int J Aging Hum Dev

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The cost and prevalence of chronic health conditions increase in late life and can negatively impact accumulated wealth. Based on the financial challenges midaged and older adults face, we sought to understand the evolution of distinctive sequences of chronic health conditions and how these sequences affect retirement savings. We used 10 waves of the Health and Retirement Study and tracked the health states and changes in wealth of 5,540 individuals. We identified five typical sequences of chronic health conditions, which are defined as follows: Multimorbidity, Comorbidity, Mild Disease, Late Event, and No Disease. Wealth accumulation differed across the five sequences. Multimorbidity and Comorbidity were the most costly sequences. Individuals with these health patterns, respectively, had $91,205 and $95,140, less net worth than respondents identified with No Disease. Our findings suggest policy makers consider sequential disease patterns when planning for the health-care needs and expenditures of older Americans.

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The Risk of Out-of-Pocket Health Care Expenditure at the End of Life

Cited by 26 publications

References 0 publications

Out‐of‐Pocket Medical Expenditures in the United States: Evidence from the Health and Retirement Study

Out‐of‐Pocket Medical Expenditures in the United States: Evidence from the Health and Retirement Study

Medical Spending of the US Elderly

Sequential Patterns of Health Conditions and Financial Outcomes in Late Life: Evidence From the Health and Retirement Study

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