As many as a quarter of Medicare recipients spend more than the total value of their assets on out-of-pocket health care expenses during the last five years of their lives, say researchers at New York-based Mount Sinai School of Medicine.

In addition, they found that 43 percent of Medicare recipients spend more than their total assets minus the value of their primary residences. The findings appear online in a recent issue of the Journal of General Internal Medicine.

The amount of spending varied with the patient's illness. Those with dementia or Alzheimer's disease spent the most for health care, averaging $66,155, or more than twice that of patients with gastrointestinal disease or cancer, who spent an average of $31,069. Dementia patients often require special living arrangements, which accounts for the sizeable difference in cost.

"Medicare provides a significant amount of health care coverage to people over 65, but it does not cover co-payments, deductibles, homecare services, or non-rehabilitative nursing home care," says the study's lead author, Dr. Amy S. Kelley, assistant professor of geriatrics and palliative medicine at Mount Sinai. "I think a lot of people will be surprised by how high these out-of-pocket costs are in the last years of life."

The researchers based their findings on data from 2002 to 2008 that was collected from the Health and Retirement Study, a biennial survey of 26,000 Americans over the age of 50.

They examined 3,209 Medicare recipients during their last five years of life and compared their out-of-pocket health care expenditures with their total household assets. The study found that the average spending for all participants was $38,688, with more than 75 percent of households spending at least $10,000. The top quarter of participants spent an average of $101,791.

"There are a number of schools of thought on how to rein in Medicare costs, including requiring larger financial contributions from the elderly," Kelley says. "Prior to this study, there was not a lot of data on the extent of out-of-pocket spending. This information can serve as an important tool to help individuals set realistic expectations for end-of-life health care costs, and for government officials to use in discussing Medicare policies."