Health Care Spending by Age Group

Since my previous attempt to break down health-care costs demographically was a failure, I thought I’d try it again. Here’s what I came up with.

At about $20,000 a year, healthcare spending by the 65 and over set is pretty staggering really.

2006 Health Care Spending by Age Group

The details for 2006.

1990 Health Care Spending by Age Group

Here’s the math I used to get these numbers.

Consumer Expenditure Survey

The numbers I was using last time were from the Bureau of Labor Statistics Consumer Expenditure Survey. Those numbers covered only consumer expenditures on health insurance, medical services and drugs and supplies and totaled only $285 billion. In 1990, consumers actually spent $233.7 billion on Private Insurance and $136.1 billion on out of pocket expenses, for a total of $369.8 billion.

Let’s adjust the survey numbers to reflect what Census says was the actual expenditures in 1990.

Source

Let’s see if we can allocate the remainder of healthcare spending for 1990 to a specific age demographic. Total health care spending in 1990 was $714 billion. If we subtract out $46.3 billion in research and facilities construction we are left with $667.7 billion spent by consumers.

Medicare

After we take out the $369.8 billion of personal expenditures detailed above, we are left with $297.9 billion in unallocated healthcare spending. $109.5 billion of that amount was spent on Medicare. That’s an additional $3,532 per person over the age of 65.

Medicaid

That leaves us with $188.4 billion in unallocated healthcare spending. $78.7 billion of that amount was spent primarily on Medicaid. I was unable to find a breakdown of Medicaid spending in 1990 so we’ll just have to use 2006 allocations.

In 2006, Medicaid spending was allocated as follows: Elderly 23%, Adults 13%, Children 19% and Disabled 46%. Using that breakdown, we’ll allocate 1990 Medicaid spending demographically.

Sidebar One: Although the elderly and the disabled account for 25 percent of the individuals enrolled in Medicaid, they are responsible for 69 percent of Medicaid spending. More…) and

Medicaid accounts for 40% of all long-term care services delivered and almost half of all nursing home expenditures in the U.S., making Medicaid the nation’s largest single payer of long-term care services.

Among Medicaid enrollees using long-term care services, just over half (55%) were elderly, 34% were individuals under age 65 classified as disabled, and 11% were adults and children who qualified for Medicaid based on income or other eligibility pathways.More…)

Other Healthcare Spending

That leaves us with $109.7 billion in healthcare spending unallocated (with who I’m allocating it to in parenthesis):

• Workers’ compensation $17.4 billion (Adults 25 to 64);
• Defense Dept. hospital $10.4 billion (Adults 25 to 64);
• Veterans’ hospital, medical care $10.8 billion (Adults 35 and over);
• Maternal, child health programs $1.7 billion (Adults 25 to 44);
• Public health activities $20.0 billion (All);
• State and local hospitals $7 billion (All);
• Other $42.4 billion (All).