The Growing Cost of Aging in America

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
196027, 214, 000, 000
197074,563,000,000
1980255,331,000,000
1990721,393,000,000
1994967,219,000,000
19951,021,635,000,000
20001,369,125,000,000
20052,023,744,000,000
20102,598,823,000,000
20153,200,815,000,000
Projected 20204,090,900,000,000
Projected 20255,369,800,000,000

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

19706.2%
19808.2%
199011.3%
199512.5%
200012.5%
200514.5%
201016.4%
201516.9%
201617.2%

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

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

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

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

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

Prescription Drug Spending by Age and Source of Payment

AgeSource of PaymentAmount
45-64Total All Payers105,133,000,000
Private Health Insurance57,190,000,000
Out of Pocket18,912,000,000
Medicare17,175,000,000
Medicaid6,348,000,000
All Other Payers and Programs5,508,000,000
65-84Total All Payers73,583,000,000
Private Health Insurance17,670,000,000
Out of Pocket14,053,000,000
Medicare38,732,000,000
Medicaid922,000,000
All Other Payers and Programs2,206,000,000
85+Total All Payers11,150,000,000
Private Health Insurance2,086,000,000
Out of Pocket2,122,000,000
Medicare6,352,000,000
Medicaid238,000,000
All Other Payers and Programs352,000,000

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