After the last of the baby boomers become fully eligible for Medicare, the federal health program can expect significantly higher costs in 2030, because of the high number of beneficiaries and because many are expected to be significantly less healthy than previous generations.
The typical Medicare beneficiary who is 65 or older then will more likely be obese, disabled, and suffering from chronic conditions such as heart disease and high blood pressure than those in 2010, according to a report by the University of Southern California Schaeffer Center for Health Policy and Economics.
Adjusted for inflation, overall Medicare spending is projected to more than double between 2010 and 2030, to about $1.2 trillion. A massive influx of baby boomers into Medicare will be the main driver. With the last baby boomers turning 65 in 2029, Medicare rolls are expected to number 67 million Americans in 2030, the Schaeffer Center said.
But costs per beneficiary could grow by 50 percent over the same time because of longer life expectancies, shifting health trends, and medical cost inflation, the report said. In inflation-adjusted dollars, Medicare is projected to spend 72 percent more for the remaining lifetime of a typical 65-year-old beneficiary in 2030 than for a 65-year-old in 2010.
"It'd be one thing if there was an increase in life expectancy while maintaining health," said lead researcher Dana Goldman at USC, "but this is different. If you have more people that are disabled, it's more costly, and we're paying more because they're living longer.
"In some ways, we are victims of our success" in extending lives and preventing mortality, he said. "We've done such a good job of preventing cardiovascular disease that now we have more cancer and Alzheimer's."
On average, people who make it to 65 in 2030 will live an additional 20.1 years, an increase of about a year over the current estimate.
People with disabilities at 65 will extend their old ages, too - by more than a full year, to 8.6 years in 2030, the Schaeffer Center said.
Obesity is likely to surge, affecting 47 percent of Medicare elderly beneficiaries by 2030, up from 28 percent in 2010, according to the report.
"The people about to become eligible are more sick and obese" than past beneficiaries," said Etienne Gaudette, a lead economist from the Schaeffer Center, "even though there are treatments that will keep them living longer."
Significant increases in beneficiaries with these chronic conditions are also forecast by 2030:
Hypertension - 79 percent vs. 67 percent in 2010.
Heart disease - 43 percent vs. 36 percent.
Diabetes - 39 percent vs. 24 percent.
Three or more chronic conditions - 40 percent vs. 26 percent.
Smaller increases are forecast for elderly beneficiaries with cancer (26 percent vs. 21 percent) and stroke (19 percent vs. 14 percent in 2010. Lung disease is expected to undergo the slowest growth of all, about one percentage point, to 16 percent.
That change is mostly due to Americans' declining smoking habits. By 2030, 52 percent of Medicare beneficiaries will be lifelong nonsmokers; only 43 percent were in 2010, the report said.
The Schaeffer Center's report was published Nov. 28 in the Forum for Health Economics and Policy.