Life expectancy for older adults has increased dramatically in recent years. But do more years in old age mean more time struggling with serious illness and frailty? A new study by two highly respected health care economists comes up with a surprising answer: No.

Even as seniors are living longer, their overall health in old age appears to be improving and they are living relatively healthy lives for longer, according to the study, by Stanford University health economist Liran Einav and MIT economist Amy Finkelstein.

As a result, while older adults still need personal care and other supports, they can put off this assistance for years. Or to put it another way, additional years in old age, even very old age, are on average healthy ones. They do not result in extra years of serious illness and care needs.

The Numbers

To put numbers on it, from 1992 to 2017, life expectancy of a 66-year-old increased by 2.4 years, itself a remarkable achievement. But the time during which those older adults were frail did not increase at all. It just was postponed. Indeed, the period of most serious physical and cognitive decline that requires the highest levels of personal care fell by nearly one-third.

Other studies have concluded that 70% of older adults will need some long-term care before they die and about half will need a significant amount of care. Einav and Finkelstein calculate you still are likely to need help in the last few years of life. But on average those years will come at an older age.

They found that in 1993, the average 80-year-old needed help with 2.6 activities of living, such as dressing, cooking, or shopping. By 2017, that had declined by more than one-third to 1.6 activities. A 75-year-old in 1993 was roughly as frail as an 80-year-old in 2017.

Another perspective: In 1993, 42% of 80-year-olds needed no help with personal activities. By 2017, 55% managed their days without assistance.

Indeed, the period of time during which older adults were living with the most severe physical and cognitive limitations actually declined by more than six months or about 30%.  And that suggests the time people need care at home or in nursing facilities may be  declining.

These results are important for all of us as we plan for old age. They could affect the price of insurance. And they may matter for government policymakers.

Social Security And Medicare

The policy consequences are fascinating. Einav and Finkelstein conclude that while those extra years in old age add significantly to Social Security costs, they are much less of a burden on Medicare spending.

The effect of added years on Social Security is straightforward math. More people living longer collect more benefits, thus adding to the program’s already severe financial pressures. The 2.4 year, or 14%, increase in life expectancy from 1993 to 2017 boosted projected lifetime benefits by about $42,500, or roughly 14%.

But the health care story is much more complicated. Those extra years of life increased health care spending by $21,700, about half the extra Social Security costs.

The authors calculate those extra years of life would result in additional lifetime Medicare spending of about $10,800.  Add it up and total public Medicare and Social Security spending over those extra 2.4 years of life: A bit more than $53,000, with 80% of the increase coming from Social Security.

Beyond The Top Line

Of course, the longer people live the more they will spend on medical care. But, because older adults are healthier than ever, the increase is dramatically smaller than you might expect. And there is a lot going on inside these top-line health care numbers.

For example, expected health care spending increased by 15% for men but only 2% for women over the 1993-2017 period, largely because women were living much less time in extreme frailty. And it grew three times faster for high-income older adults, who enjoyed most of the increase in life expectancy, than for those with lower incomes.

As the authors put it, more 85-year-olds will increase health care spending. But that rise will be partially offset by healthier 75-year-olds, who will use less medical and long-term care than they once did. Age matters less than time to death.

Many analysts have concluded the rising numbers of the old-old will sharply increase demand for home and institutional care. But Einav and Finkelstein question that. Why? Because those expenses will decline for younger, healthier older adults.

Their results are not without controversy. Other studies have concluded that the aging population will result in much bigger increases in spending for care.

Other issues: Their analysis ends with decade-old data. How did intervening events, such as the pandemic or development of new medical technologies such as GLP1 drugs or medications that could slow the progression of Alzheimer’s disease, change the pattern Einav and Finkelstein found?

The authors focus primarily on Social Security and Medicare spending. That’s important. But it largely excludes the costs of long-term care, which is mostly funded by Medicaid and out-of-pocket spending. It would be useful to know how the authors calculate how extra years of life directly affect those expenses.

But Einav and Finkelstein bring an important new perspective to the critical questions of how an aging population will consume care dollars and how government should think about the two biggest spending programs in its budget—Social Security and Medicare.