The implications of demographic changes for publicly funded medical insurance costs

This paper explores the changes in public expenditures for Medicare and Medicaid that would result between 1980 and 2040 under the ceteris paribus assumption, under the age, sex, and family structure projections of John Wilkin of the Social Security Administration. Inflation aside, costs are shown to approximately double as a percent of the payroll of active workers. The most dramatic increases occur in nursing home costs: Costs for welfare recipients under age 65 change little except for medical care inflation. This latter results from the assumed low birth rates assumed in the population forecast.