Elderly Faced
Slower Increase
In Medical Costs

ASSOCIATED PRESS
November 6, 200

WASHINGTON -- Health-care spending for people under 65 years of age is growing faster than for those over that benchmark age, the government reported.

While the growing number of older Americans has been expected to alter the patterns of health spending throughout the country, the impact has been only modest and is expected to remain that way, said the Centers for Medicare and Medicaid Services at the Department of Health & Human Services.

Not surprisingly, per-person spending is higher for older people than younger ones. But it hasn't been growing as fast as costs for working-age people, the CMS reported in a paper that appears in the journal Health Affairs. Among the elderly, the largest decline in spending relative to younger people occurred among those who were aged 85 and older.

Spending for this group was 6.9 times higher than spending by the working-age population in 1987, but 5.7 times higher in 2004. For those 65 and over, health costs were 3.5 times higher than working-age people in 1987 and 3.3 times higher in 2004.

As members of the massive post-World War II baby boom turns 65 they will add to the younger end of the elderly population, a group that is relatively less costly for medical care than those 85 and over. In addition, nursing-home costs have been rising relatively slowly, the agency reported.

Per-person health spending from all sources in 2004 was $5,276, the report said, up from $1,796 in 1987. For people 18 and under, spending was $2,650, up from $868. The increase for working-age people, 19 to 64, was from $1,521 to $4,511. For people aged 65 and over it went from $5,282 to $14,797.

Of the $5,276 spent per individual on health care in 2004, $802 was out-of-pocket, $1,898 came from private health insurance, $221 came from other private sources such as workplace clinics, $1,032 was from Medicare, $918 from Medicaid and $405 from other public sources such as state and local agencies.

President Bush and Congress are engaged in a debate over expanding the SCHIP health-insurance program for low-income children. Congress wants to expand the program, but the president vetoed that, opposing the costs and raising the concern that children would be shifted from private insurance plans to the new government coverage. But the report indicates that didn't happen after SCHIP was launched in 1997. The main impact of the new program was on out-of-pocket expenses for the families.

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