According to an article from the New York Times by Austin Frakt, The United States’ median age will increase from 37.7 years old (now, in 2017) to about 40 years old by the year 2040. Why is this? Well, the “average American” lives almost 3 years longer today than they did in 1995 — 79 years old compared to 76.
What do these increasing statistics mean for health care spending? The Congressional Budget Office says that America’s aging population will make health care spending go from 5.5% of our economy today to around 9% by 2046. So as the longevity of Americans increases so will the health care spending.
Healthcare Spending: What’s Influencing the Increase
But Austin says that it’s not necessarily just the longevity that is making health care spending increase — it’s also the aging of the baby boomers. The baby boomers are currently between 50-60 years of age, and because of them, the average age of Americans would continue to increase regardless of the life expectancy did or did not.
Since there are tons of baby boomers and older people require more health care, the economy’s health care spending has increased and will continue to. So besides these baby boomers, what else is leading to increased health care spending? Technology.
Technology in health care has advanced over the years to help more people, but it comes at a higher price. Austin says that “Technology change is responsible for at least one-third and as much as two-thirds of per capita health care spending growth.” Certain technologies are helping us to live longer, such as the invention of new treatments for things such as cardiovascular disease.
These treatments are keeping us alive longer but with more complications; these complications require additional health care coverage for a longer period of time. So basically, Americans are living more years with poorer health, resulting in more medical care.
A Harvard health economist named Michael Chernew says that “Certainly we must address the problems associated with financing health care spending and health disparities, but we can take some solace in evidence that more people are living longer and better.”
One study that was completed to investigate the concept further found that hospital costs have grown 1,000% in a person’s last 5 years of life, but only increase 30% ages 65-80. So, higher health care spending may have more to do with how close they are to death rather than their age.