Health Care Spending and the Aging of the Population

Abstract

[Excerpt] Health care spending has been growing as a share of national income, as a share of federal spending, and as a share of many consumers’ income. Because people tend to use more health care as they age, many observers are concerned that an aging population will accelerate growth in health care spending, and that such growth will lead to economic and fiscal crisis. Over the next several decades, both national and federal spending on health care are expected to grow rapidly for two basic reasons. The first is changing demographics. As the share of older people in the population grows, health spending also will grow to reflect generally higher per capita health care costs for this population, compared with younger people.