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Related Experiment Videos

Increasing longevity and Medicare expenditures.

T Miller1

  • 1Center for the Economics and Demography of Aging, University of California at Berkeley, 2232 Piedmont Avenue, Berkeley, CA 94720, USA. tmiller@demog.berkeley.edu

Demography
|June 8, 2001
PubMed
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Official Medicare projections may overestimate future healthcare costs. Using time until death instead of age as a health indicator suggests lower costs, though savings may not solve Medicare

Area of Science:

  • Health economics
  • Demography
  • Gerontology

Background:

  • Official Medicare projections forecast rising costs due to an aging population.
  • Current models use chronological age as a proxy for health status and healthcare utilization.
  • Increased longevity is presumed to lead to prolonged periods of higher healthcare spending.

Purpose of the Study:

  • To propose and evaluate an alternative demographic indicator for Medicare cost projections.
  • To assess the impact of using "time until death" instead of "age" on future healthcare cost estimates.
  • To compare the Medicare solvency implications of age-based versus time-until-death-based forecasting.

Main Methods:

  • Utilized mortality forecasts from the U.S. Census Bureau and Social Security Administration.

Related Experiment Videos

  • Contrasted two demographic approaches: age as an indicator versus time until death as an indicator.
  • Modeled Medicare utilization and costs based on both forecasting methods.

    • Main Results:

    • The time-until-death approach yielded significantly lower Medicare cost projections.
    • This alternative method assumes increased longevity postpones high-cost healthcare utilization.
    • The projected cost savings were modest relative to the overall Medicare solvency challenge.

    Conclusions:

    • Rethinking demographic indicators can refine Medicare cost projections.
    • Shifting from age to time until death offers a more nuanced view of future healthcare needs.
    • While promising, this methodological shift alone does not resolve the fundamental Medicare solvency issue driven by population aging.