Working Paper: NBER ID: w7279
Authors: David M. Cutler; Ellen Meara
Abstract: In the last two decades, Medicare spending has doubled in real terms despite the fact that the health of Medicare beneficiaries improved over this period. The goals of this paper are to document how trends in spending by age have changed among elderly Medicare beneficiaries in the last decade and to reconcile the decline in disability rates with rapid increases in spending among the elderly. First, we conclude that the trend of disproportionate spending growth among the oldest old has continued between 1985 and 1995. Spending among the younger elderly, those 65-69 rose by two percent annually in real per person terms. In contrast, spending for those over age 85 rose by 4 percent. Second we show that the reasons for the large increase in spending on the oldest elderly relative to the younger elderly is the rapid increase in the use of post-acute services such as home health care and skilled nursing care. Spending on post-acute care for the very old has risen 20 percent per year in the last decade.
Keywords: No keywords provided
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| age (J14) | medical spending (H51) |
| decline in health status (I14) | medical spending (H51) |
| age (J14) | decline in health status (I14) |
| time until death (C41) | medical spending (H51) |
| disability (J14) | medical spending (H51) |
| post-acute care services utilization (I11) | medical spending (H51) |
| disability (J14) | age-related spending differences (H51) |
| time until death (C41) | age-related spending differences (H51) |