OBJECTIVES:  The objective of our study is to estimate the excess burden of annual total direct out-of-pocket spending and out-of-pocket spending on different types of healthcare services among elderly Medicare beneficiaries with Alzheimer's Disease and Related Dementias (ADRD) by comparing them to Medicare beneficiaries without ADRD. METHODS:  We used data from 2012 Medicare Current Beneficiary Survey. The study sample comprised older adults (age>65 years), living in the community, with positive total healthcare expenditures, and enrolled in Medicare throughout the calendar year (462 with ADRD, and 7,160 without ADRD). We estimated the total out-of-pocket spending on healthcare and out-of-pocket spending by service type: inpatient, outpatient, home health, prescription drugs, and others. We measured out-of-pocket spending burden by calculating the percentage of income spent on healthcare and defined high out-of-pocket spending burden as having this percentage above 10%. Multivariable analyses included ordinary least squares regressions and logistic regressions that adjusted for predisposing, enabling, need, personal healthcare practices and external environment characteristics. RESULTS: The average annual per-capita out-of-pocket healthcare spending was greater among individuals with ADRD compared to those without ADRD ($3,285 vs. $1,895); home health and prescription drugs accounted for 52% of total out-of-pocket spending among individuals with ADRD and 34% among individuals without ADRD. Higher out-of-pocket spending burden by those with ADRD persisted even after adjustment for other factors (Beta=3.38, p=0.003). Elderly individuals with ADRD were more likely to have high out-of-pocket spending burden (AOR =1.49; 95% CI=1.13, 1.97) compared to those without ADRD. Our results showed that ADRD is associated with excess out-of-pocket healthcare spending, primarily driven by prescription drugs and home healthcare use. CONCLUSIONS:  Medicare beneficiaries with ADRD have higher out-of-pocket expenditures as compared with Medicare beneficiaries without ADRD. The financial burden as a percent of income is higher with Medicare beneficiaries with ADRD as compared with Medicare beneficiaries without ADRD.