April 28, 2017

Our Coming Deficits Are Driven by Old People, Not Health Inflation

March 20, 2013
The Washington Post


A more accurate way to put it would be that in the coming decades, new spending is almost entirely driven by health-care programs. But what’s really driving the spending in those programs is the aging of the population, not the rise in health-care costs. Over at the Concord Coalition’s blog, Joshua Gordon makes this point in an unusually clear way — by which I mean, of course, with graphs. . . . 

But even at this higher estimate (for Medicare costs), the increase in spending is really coming from the increase in old people. As Gordon writes, “The total increase in Medicare costs from [health care] inflation is only 0.7 percent of GDP. Alternatively, growth due to aging accounts for 1.9 percent of GDP.”