Medicare’s oldest beneficiaries (octogenarians, nonagenarians, and centenarians) account for a disproportionate share of Medicare’s annual budget. In 2011, beneficiaries over the age of 80 were 24 percent of the senior Medicare population, but they accounted for 33 percent of Medicare spending. In comparison, beneficiaries ages 65 to 69 were 26 percent of the senior Medicare population, and accounted for 15 percent of Medicare spending.
Medicare’s overall per capita spending in 2011 increased with age, reaching its peak at age 96, and then gradually decreased with the small number of older beneficiaries. Medicare’s average per capita spending more than doubled with seniors age 70 ($7,566) and age 96 ($16,145) in 2011.
This increase in Medicare per capita spending is partially explained by the rising cost of end-of-life care. Medicare’s per capita spending (not including beneficiaries who died) experienced a corresponding increase with age, peaking at age 96 ($14,278) before falling.
Conversely, per capita spending by Medicare for beneficiaries who died in 2011 declined steadily with age, decreasing from $43,000 with those 70-year-olds to less than $20,000 beneficiaries over the age of 100. However, due to the higher rate of death of older beneficiaries, the per capita spending among those who passed at older ages has more impact on the estimates of average spending of the older beneficiaries.
Between the years 2000 and 2011, per capita spending (adjusted for inflation) peaked at older ages. It was highest at the peak age in 2011. Spending peaked at age 92 in 2000 ($9,557 inflation-adjusted), increasing to age 96 in 2011 ($16,145 including Part D costs).
The difference in Medicare spending per capita on younger beneficiaries and those ages 80 and older is rapidly widening. Medicare’s per capita spending was 250 percent more for 85-year-olds ($13,466) and 300 percent more for 95-year-olds ($15,732) than for 66-year-olds ($5,562).
In the years 2000 through 2011, spending grew faster for beneficiaries ages 90 and older than for those over age 65, both including and excluding Part D spending. With Part D costs, per capita spending increased an average of 5.8 percent annually for beneficiaries ages 66 to 69 (2006 to 2011), increasing to to 7.3 percent among beneficiaries 90 years and older.