Average out-of-pocket Medicare spending hit $3,103 annually in 2006, according to an AARP Public Policy Institute report released this week. About 10 percent of Medicare recipients spend over $8,300 in out-of-pocket funds annually, which translates into about 25 percent of total income for the poorest recipients.

Three-quarters of the out-of-pocket spending in 2006 were for nursing home costs, prescription drugs and care providers. 

Median out-of-pocket spending for long-term health care facilities was $7,611 annually, with 10 percent of beneficiaries spending at least $41,900 for room-and-board or long-term care, most likely because they were spending down assets in order to qualify for Medicaid, the study found.