The Cost of Dying

The average individual in Medicare spent $38,688 [out-of-pocket] in their last five years of life. The average couple spent $51,030 in the five years before one spouse died. But spending wasn’t evenly distributed. For individuals, the median amount spent was $22,885, but the 90th percentile spent was $89,106. That means that ten percent of people had to spend more than $89,000 out of their own pockets. For couples, the median was $39,759, and the 90th percentile was $94,823.

Aaron Carroll commentary. Study.

Comments (12)

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  1. Gabriel Odom says:

    Wow, that data is really skewed.

  2. Tyrus says:

    Seems very counterintuitive.

  3. Mulligan says:

    Does this include estate taxes? Not enough time to follow the link.

  4. Dorothy Calabrese, M.D. says:

    What is the teaching value of analyzing patient metrics for those who die, absent any valid comparison to their cohorts who also “should have died” but lives were saved by aggressive, expensive medical intervention?

    What is the value of comparing the amounts spent for the median and the 90th percentile at the end of life if they’re not matched cohorts?

    How does this incorporate the fact that many patients fit both categories by using up all their resources at the end-of-life until they become dual-eligible?

    Why don’t we compare dual eligible [Medi-Medi] patients [who pays zero out-of-pocket] to matched cohorts who have the resources to pay >$89,000 out-of-pocket?

    Why do we expect to learn from terminally-ill Medicare patients and not thoroughly compare and contrast end-of-life cohort studies with terminally-ill pediatric patients?

    Physicians live in a real and practical world where “the cost of dying” stats should more directly inform what orders we make and what choices patients choose to make.

    Dorothy Calabrese, M.D.
    Allergy & Immunology San Clemente, CA

  5. Dennis Byron says:

    Historically, commentary by The Incidental Economist (TIE) concerning Medicare indicates a lack of understanding of how Medicare works, what it covers, and what we seniors actually do as opposed to what some statisticians think we do. The TIE post to which you link is no exception but that may because of some characteristic of the study itself which was not done by TIE.

    Most of the expenses in this survey are for items such as nursing homes and ADL and (the methodology is unclear) maybe dental, expenses that are not covered by Medicare… So implying this finding has anything to do with Medicare is nonsensical. On the other hand, how much money did some goo goo foundation spend to find out it’s expensive to die no matter who pays for it?

    According to the methodology section of the document (not sure all of it is shown in the snippet on the website that one can see for free), the out of pocket (OOP) expenses measured also includes insurance premiums. FYI, a perfectly healthy person on Medicare and an average supplement who did not die or even get sick during the surveyed period spent about $12,000 out of pocket just on premiums not counting what he or she spent on drugs, dental, hearing, etc. (drug premium costs not used in my example because all or much of the survey data predates implementation of Part D).

    The survey data also says it includes only people over 70 so this cannot be said by TIE to reflect an “average individual” Medicare beneficiary but only older individual Medicare beneficiaries.

    Actually given that the survey data included nursing home expenses, I am surprised the number is so low. Apparently the study is factoring in the actual OOP of people after they purposely and legally spent down so that Medicaid picks up most of the nursing home costs, not the real expense (so again, what’s this years-old data pretend to prove?).

  6. Dorothy Calabrese, M.D. says:

    Great insight Dennis! I am not familiar with TIE, and have only read it when there’s a link from this blog. Where do you typically find your most reliable information regarding Medicare statistics coming from? How balanced have you found Health Affairs to be? As a physician in clinical medicine practicing at the far end of the referral tree, I might as well have been under a rock for the past 30 years.

    It wasn’t until I had the good fortune to read John Goodman’s “Priceless” when it was first released that this field became comprehensible in real time with real ideas and stats. Frankly, I never planned on immersing myself into this area of expertise until the US GOVT decided to tell me how I am expected to practice medicine in complete contradiction to the Medical Board of California. Any sources / references would be greatly appreciated – either posted here or to my e-mail at

    Dorothy Calabrese, M.D.
    Allergy & Immunology San Clemente, CA

  7. Bob Hertz says:

    Good for you, Dennis.

    Medicare Part A has a deductible of about #1,100, and the patient has no more hospital charges for the next 60 days. The percentage of those who stay over 60 days is minute.

    Medicare Part B does have 20% coinsurance, but most seniors have either a supplement or a Medicare Advantage policy that picks most of the 20%.

    Of those seniors who do not have a supplement, some of them are poor enough to be on Msdicaid, which has neither deductibles nor coinsurance.

    Therefore you are right that the high cost of dying is the expense of personal care, whether in a nursing home or hospice or in home nurses.

    At the risk of sounding corny, people have been dying for a long time. In most countries, and in America before about 1950, dying persons were cared for largely at home and largely by either unmarried daughters or married daughters who did not work outside the home.

    Our preference today is for paid care instead. But we have not gotten our heads around the fact that we will need higher taxes to afford this paid care.

  8. Dennis Byron says:


    Without a doubt the best source is talking to seniors on Medicare like me. But I have a leg up in that I am what is known as a SHIP volunteer*, one of about 25,000 volunteers nationwide trained and certified by the Medicare bureaucracy and working (mostly in senior centers) around the U.S. helping other seniors with Medicare and general senior healthcare-insurance issues. I have a leg up because I not only have my own experience and make the tradeoffs all seniors have to make (elite academics call this cost sharing) but I talk to a couple of hundred other seniors every year so I have a good sense of Medicare-related trends before they happen (e.g., the recent problems with the CVS Caremark Silverscript Part D plans reported on in late January showed up on the SHIP volunteer radar in early December, hopefully soon enough that they won’t cause seniors on Silverscript any serious problems).

    For pure statistics, the best and only source (but it is still bad) is a group called MedPAC, which is to the Medicare bureaucracy what the CBO is to Congress. It is good in that appears to be truly non-partisan. It is bad in that the Democratic-Party view of the world is so ingrained in MedPAC’s non-partisan employees that it totally misrepresents Part C Medicare health plan statistics in its reports without even realizing it. That didn’t matter much statistically when Part C was used by only 5% of seniors but now that the market penetration of Part C is approaching 30% (despite the Medicare bureaucracy and Democratic Party advising and lobbying against it constantly — see comment above) the MedPAC information is unfortunately highly skewed.

    As for Health Affairs, strictly in terms of Medicare, I find very little usefulness. Of course, I am just a “poor pensioner” and cannot afford to buy it and its articles are not free. A doctor I know lets me read his copy when I really want to see an article.

    [*I recently suspended my Massachusetts Medicare volunteer work because the Massachusetts SHIP program is an extension of the Massachusetts Democratic Party. In Massachusetts this supposedly impartial Medicare advice service for seniors actually told volunteers to distribute Obama election material during the recent presidential election. The Massachusetts SHIP volunteer program also strongly advises volunteers to tell seniors not to sign up for Part C Medicare Advantage health plans, apparently solely for partisan-political reasons (since the objective facts in Massachusetts say Part C is a great deal, particularly because so many of the people in Massachusetts coming onto Medicare are coming from HMOs, which have always been very popular here.)]

  9. Gabriel Odom says:

    Bob, you are absolutely right about that. We have increased the life expectancy dramatically without increasing the years of healthy life expectancy all that much.
    We humans ever seek to defy death. I know it sounds cliché, but literature is filled with stories of the classic villain seeking to become immortal in some way or another – overcome by his/her desire to be remembered or live forever. This person strives to continue his legacy, even at the expense of his/her relationship with family or personal happiness. We often strive to extend our lives, without thought for the consequences to our family or others.

  10. Dennis Byron says:


    Thanks for the comment on my comment.

    You are right, probably righter than you know, that “most seniors have either a supplement or a (Part C) Medicare Advantage policy that picks (up) most of the 20% (that Part B does not pick up).”

    In fact, according to MedPAC (rough numbers off top of my head):
    — 40% of seniors have retiree insurance (but that is dropping)
    — 30% have a Part C plan (has grown 500% in last six years)
    — 20% have a Medigap supplement
    — 15% are on some form of Medicaid
    — A few percent get supplementary coverage from a spounse or the VA or a few other minor choices percentage wise
    — Only 5% depend only on Medicare Parts A and/or B (presumably very rich people)

    The numbers add up to more than 100% because many Medicare beneficiaries who get Medicaid assistance (the most popular form of which is paying the seniors’ Part B premium, not covering all their co-pay and co-insurance costs) use their “saved” Part B premium to buy a Part C plan or Medigap plan.

    Also when you say:

    “(many) seniors have… a (Part C) Medicare Advantage policy that picks (up) most of the 20% (not covered by Original Medicare Parts A and B)

    It is important to realize that Part C does much more than that. The most important feature of all Part C plans which all Original Medicare and most Medigap plans lack is catastrophic coverage. (I get apoplectic when I hear the Democratic Party bragging about the fundamentally bad insurance product that Original LBJ Medicare was and still is.) In Massachusetts, going on Part C is the only way a senior can get catastrophic coverage. In addition, most but not all Part C plans offer dental and/or drug and/or hearing and/or annual physicals and/or ER coverage outside the U.S. and coverage for many other normally expected healthcare services not covered by Democratic-Party Original Medicare.

  11. Sadat says:

    Death is a fact of life. If you are spending 80K on the last few years of your life, may be it is time to reconsider your life priority and come to terms with reality.

  12. Al says:

    ” (TIE) concerning Medicare indicates a lack of understanding of how Medicare works”

    Very astute Dennis. Tie has a point of view and seems to look with tunnel vision and no further. In that way it cannot see evidence contrary to what it believes and thus is relegated to being wrong and out of touch much of the time.