Aging Isn't Driving Boomers' Health Increases

The findings from the Center for Studying Health System Change (HSC) included that population aging contributed an estimated 0.7% in 2001, or less than 10% of the total increase in per capita health care spending for people under 65.

According to the HSC, annual per capita health spending increases by about $74 on average (2001 dollars) for each additional year in age between 18 and 64, although spending starts rising more rapidly after age 50 — about $152 for each additional year in age between 50 and 64. The average age of Americans younger than 65 is increasing about 0.13 years annually.

So differences in spending by age are not large enough and the US population is not aging quickly enough to make aging a major cost driver for the under-65 population. For certain categories of health care services, such as cardiovascular services, aging may be a more important factor than it is for all types of services combined.

Projections through 2010 suggest that the role of aging as a cost driver for the under-65 population will remain limited. For example, in 2005, aging will cause per capita health care spending for people under 65 to increase about 0.7%; in 2010, that figure will be 0.6%.

Financing the boomers’ care later in life will severely strain the federal budget, leaving fewer resources for competing spending needs and forcing policy makers to consider tough trade-offs, such as reducing benefits, raising taxes or allowing larger deficits, HSC researchers said.

Employers, workers, and policy makers are currently struggling with the current growth in private insurance premiums for people under 65. Increased insurance costs lead to fewer employers offering coverage and fewer employees enrolling in the plans available to them, the report said.