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The Growing Cost of Aging in America Part 1: An Aging Population and Rising Health Care Costs

April 6, 2018 

Americans are living longer than ever. In 1900, 4.1 percent of the U.S. population was 65 and older. The Census Bureau projects that by 2050, nearly 20 percent of the population will be 65 and older (PDF, 12.3MB). This unprecedented demographic shift is the result of several factors, including the aging baby-boom generation, a reduction in smoking (PDF, 626KB) and other lifestyle changes, and significant medical advances related to infectious and chronic diseases. But a growing aging population — especially among those older than 85, who are most likely to require expensive long-term care, suffer disability or require assistance with daily activities — comes with serious financial consequences.

Explore the Rest of the Series

Part 1

AN AGING POPULATION AND RISING COSTS

Part 2

MEDICARE AND SOCIAL SECURITY

Part 3

SOURCES OF CARE

In a three-part series, we’ll look at the economic ramifications of the growth of the older population in the U.S. In the first installment, we look at the numbers behind this growth, the increase in national health costs, and the cost of health care for aging Americans. In the second part, we will cover the costs associated with Medicare and Social Security. Finally, our third graphic will explore long-term care options and costs, as well as the financial costs for family caregivers.

  • As baby boomers age, the sheer number of older adults will be unprecedented in U.S. history. The portion of the population living on fixed incomes with high medical expenses will increase as the proportion of seniors — especially those older than 85 — grows. As a result, the health care system and federal programs such as Medicare and Social Security will come under increasing financial strain.

    In 2015, there were already 47.8 million people aged 65 and older in the United States.1 

    An Aging Population

    Growth of Population Aged 65 and Over

    YearNumber of People Aged 65 + (Total U.S. Population)
    19802
    25,549,000 (226,546,000)
    19803
    31,080,000 (out of 248,718,000)
    19904
    34,991,753 (out of 281, 421,906)
    20005
    40,267,984 (out of 308,745,538)
    20106
    47,760, 852 (out of 321,418,820)
    Projected for 20607
    98.2 million “People in this age group will comprise nearly one in four of U.S. residents.”

    Growth of Population Aged 85 and Over

    YearNumber of People Aged 85 + (Total U.S. Population)
    19808
    2,240,000 (out of 226,546,000)
    19909
    3,022,000 (out of 248,718,000)
    200010
    4,239,587 (out of 281,421,906)
    201011
    5,493,433 (out of 308, 745,538)
    201512
    6,287,161 (out of 321, 418,820)
    Projected for 206013
    19.7 million

    National Health Costs

    Total National Health Expenditures, Historical14 and Projected15 

    YearAmount
    1960
    27, 214, 000, 000
    1970
    74,563,000,000
    1980
    255,331,000,000
    1990
    721,393,000,000
    1994
    967,219,000,000
    1995
    1,021,635,000,000
    2000
    1,369,125,000,000
    2005
    2,023,744,000,000
    2010
    2,598,823,000,000
    2015
    3,200,815,000,000
    Projected 2020
    4,090,900,000,000
    Projected 2025
    5,369,800,000,000

    U.S.Expenditure on Health as Percent Share of GDP16 

    19706.2%
    1980
    8.2%
    1990
    11.3%
    1995
    12.5%
    2000
    12.5%
    2005
    14.5%
    2010
    16.4%
    2015
    16.9%
    2016
    17.2%

    Health Expenditure, Where It Went in 201617 

    Percentage of Health ExpenditureWhere It Went
    32%
    Hospital Care
    20%
    Physician and Clinical Services
    4%
    Dental Services
    3%
    Other Professional Services
    5%
    Nursing Care Facilities and Continuing Care Retirement Communities
    8%
    Government Administration and Net Cost of Health Insurance
    5%
    Investment
    2%
    Public Health Activities
    5%
    Other Health Residential and Personal Care
    2%
    Durable Medical Equipment
    2%
    Other Nondurable Medical Products
    3%
    Home Health Care

    Cost of Health Care for Aging18 

    Personal Health Care Spending for Ages 45 – 64 by Source of Payment

    AmountSource of Payment
    787,562,000,000
    Total All Payers
    393,974,000,000
    Private Health Insurances
    100,422,000,000
    Out-of-Pocket
    85,363,000,000
    Medicare
    96,177,000,000
    Medicaid
    111,627,000,000
    All Other Payers and Programs

    Personal Health Care Spending for Ages 65 – 84 by Source of Payment

    627,978,000,000
    Total All Payers
    97,347,000,000
    Private Health Insurances
    94,020,000,000
    Out-of-Pocket
    338,013,000,000
    Medicare
    53,768,000,000
    Medicaid
    44,831,000,000
    All Other Payers and Programs

    Personal Health Care Spending for Ages 85 + by Source of Payment

    190,198,000,000
    Total All Payers
    19,416,000,000
    Private Health Insurances
    32,562,000,000
    Out-of-Pocket
    90,541,000,000
    Medicare
    32,093,000,000
    Medicaid
    15,586,000,000
    All Other Payers and Programs

    Prescription Drug Spending by Age and Source of Payment

    AgeSource of PaymentAmount
    45-64
    Total All Payers
    105,133,000,000
    Private Health Insurance
    57,190,000,000
    Out of Pocket
    18,912,000,000
    Medicare
    17,175,000,000
    Medicaid
    6,348,000,000
    All Other Payers and Programs
    5,508,000,000
    65-84
    Total All Payers
    73,583,000,000
    Private Health Insurance
    17,670,000,000
    Out of Pocket
    14,053,000,000
    Medicare
    38,732,000,000
    Medicaid
    922,000,000
    All Other Payers and Programs
    2,206,000,000
    85+
    Total All Payers
    11,150,000,000
    Private Health Insurance
    2,086,000,000
    Out of Pocket
    2,122,000,000
    Medicare
    6,352,000,000
    Medicaid
    238,000,000
    All Other Payers and Programs
    352,000,000

    1 https://www.census.gov/content/dam/Census/newsroom/facts-for-features/2017/cb17-ff08.pdf 

    2 https://www2.census.gov/library/publications/1995/compendia/statab/115ed/tables/pop.pdf 

    3Ibid 

    4 https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_00_SF1_QTP1&prodType=table 

    5 https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=PEP_2015_PEPAGESEX&prodType=table 

    6Ibid 

    7https://www.census.gov/content/dam/Census/newsroom/facts-for-features/2017/cb17-ff08.pdf 

    8https://www2.census.gov/library/publications/1995/compendia/statab/115ed/tables/pop.pdf 

    9https://www2.census.gov/library/publications/1995/compendia/statab/115ed/tables/pop.pdf 

    10https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=DEC_00_SF1_QTP1&prodType=table 

    11 https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=PEP_2015_PEPAGESEX&prodType=table 

    12 https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=PEP_2015_PEPAGESEX&prodType=table 

    13 https://www.census.gov/content/dam/Census/newsroom/facts-for-features/2017/cb17-ff08.pdf 

    14 https://www.census.gov/library/publications/1995/compendia/statab/115ed.html 

    15https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html 

    16http://stats.oecd.org/Index.aspx?DataSetCode=SHA# 

    17https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/PieChartSourcesExpenditures.pdf 

    18https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Age-and-Gender.html 

The Rising Cost of Aging is a Public Health Issue

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