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Medicare Spending at the End of Life: A Snapshot of Beneficiaries Who Died in 2014 and the Cost of Their Care

Of the 2.6 million people who died in the U.S. in 2014,1 2.1 million, or eight out of 10, were people on Medicare,2 making Medicare the largest insurer of medical care provided at the end of life. Spending on Medicare beneficiaries in their last year of life accounts for about 25% of total Medicare spending on beneficiaries age 65 or older.3 The fact that a disproportionate share of Medicare spending goes to beneficiaries at the end of life is not surprising given that many have serious illnesses or multiple chronic conditions and often use costly services, including inpatient hospitalizations, post-acute care, and hospice, in the year leading up to their death.

This data note provides a snapshot of Medicare beneficiaries who died at some point in 2014 and spending at the end of life. It examines Medicare per capita spending in 2014 and trends since 2000, both overall and by type of service, for beneficiaries in traditional Medicare who died at some point during the year (referred to here as “decedents”) compared to those who lived for the entire year (referred to here as “survivors”). The analysis includes beneficiaries who are under age 65 with disabilities, those who qualified for Medicare due to having end-stage renal disease, and those who are age 65 or older.4 The analysis of per capita spending excludes beneficiaries enrolled in Medicare Advantage because data on Medicare spending, overall and by type of service, are not available for these enrollees.5 The analysis is based on data from a 5% sample of Medicare claims for services covered under Parts A, B, and D for traditional Medicare beneficiaries from the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse (CCW) from 2000 to 2014.

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.