The Economic Burden of an Increasingly Aging Population

Between 2010 and 2050, the US population ≥65 years of age will nearly double, the population ≥80 years of age will nearly triple, and the number of people in their 90s and 100s will quadruple, according to a report from the US Census Bureau. As the US population continues to age, questions arise regarding Medicare costs and implications for the federal budget. A report from the Kaiser Family Foundation examined the impact of medical spending in the older population.

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The analysis found that individuals ≥80 years of age accounted for 24% of the Medicare population and 33% of Medicare spending in 2011. In addition, individuals 65 to 79 years of age accounted for 58% of the Medicare population and 45% of Medicare spending in 2011.

The average Medicare per capita spending in 2011 more than doubled between 70 years of age ($7566) and 96 years of age ($16,145). The authors of the report noted that this increase in spending can be partially explained by the high costs associated with end-of-life care.

Spending for older adults was increased in 2011 compared with 2000, even after controlling for inflation. Medicare per capita spending peaked at 92 years of age in 2000 ($9557, in inflation-adjusted 2011 dollars) and peaked at 96 years of age in 2011 ($15,015 excluding Medicare Part D spending; $16,145 including Medicare Part D spending).

In 2011, Medicare per capita spending on hospital inpatient services increased more than 2.5 times from $1848 for 66-year-olds to $4799 for 89-year-olds.

Although the authors found a gradual reduction in Medicare per capita spending among Medicare Part B providers, services, and supplies for beneficiaries in their mid- to late-80s, per capita spending increased into a person’s mid-90s due to persistent levels of inpatient hospital spending and a sharp increase in skilled nursing facility (SNF) and hospital spending. Between 86 and 96 years of age, the analysis found that Medicare per capita spending on SNF services increased by more than 50% from $2043 to $3149, while per capita spending on hospice tripled from $706 to $2299.

The authors noted that these implications have led to an increase in both Medicaid and out-of-pocket spending by age, primarily attributed to the cost of long-term services and supports that are not covered by Medicare. They also recommended that further studies be conducted to better understand the social, medical, and long-term care needs of older Americans and how to better address them.

The analysis was based on data from a 5% sample of Medicare claims from the Chronic Conditions Data Warehouse of the Centers for Medicare & Medicaid Services between 2000 and 2011, which is the most recent data available. The data included all Medicare-covered claims for services covered under Parts A, B, and D.—Kerri Fitzgerald