Healthier, Longer Lives Lead to Greater Health Costs
This is Jane Sarasohn-Kahn, writing at the HealthPopuli blog:
Here are a few specific numbers that can jolt those people who believe taking good care of themselves in life will save them money in the long run: the present value of lifetime health costs for a couple turning 65 in 2009 where one or both spouses have a chronic disease is $220,000, including insurance premiums and the cost of long term care. [Of this group,] 5% can spend over $465,000.
For a couple with no chronic conditions, the present value of lifetime health costs is $260,000 ($40K more than for the couple with chronic illness), and over $570,000 for the expensive 5% outlier couples.
I believe I have seen similar results before. Any way it is the opposite of what almost everybody in health care typically thinks.
This is a surprise. At least for me.
The cost-saving intervention that would most reduce health care spending in old age is leading an unhealthy lifestyle.
Smoking, drinking to excess and over-eating, while leading the sedentary life of a couch potato is hardly something policy analysts would propose.
Yet, during the campaign, then-candidate Barak Obama proposed to partially fund universal coverage using the savings from preventive care, catching diseases early and better disease management. All these ideas (while not bad) would actually increase aggregate health care spending.
These numbers sound a lot like the EBRI numbers, which is to say they might be an upper bound estimate. For alternative numbers see my April 30 post on this blog at http://www.john-goodman-blog.com/ebri-criticizes-hsas-again/
It isn’t clear why we are seeing more efforts to scare the heck out of people about the costs of health care for people over 65. Perhaps it is the start of an intensive campaign to convince everyone, by hook or crook, to agree that cuts in care for the elderly are essential to improving life, liberty, and the pursuit of happiness?
Insurance takes care of the problem of being an outlier and it is fairly clear that regular saving can amass enough wealth to take care of health care in old age. Of course Medicare isn’t insurance, so we should all be worried. There are so many other uses for the money. Cash for Clunkers, Fannie Mae, Freddie Mac, and stimulus funds for improvident state governments come immediately to mind.
It’s pretty intuitive that if you live fast, die young and leave a great looking corpse, you will spend far less on health care than someone who is “lucky” enough to survive into decrepitude. Unfortunately, geniuses like Michelle Obama and the food police haven’t figured this out, yet.
I’m going to make some numbers up to illustrate a point..
Total food expenses for a lifetime for a couple who both smoke is $200,000
Total food expenses for a lifetime for a couple who don’t smoke is $300,000
Total rent expenses for a lifetime for a couple who are both obese is $500,000
Total rent expenses for a lifetime for a couple who are of healthy weight is $800,000
The problem is I’m using the word “lifetime” like this study, which means something very different for my two study groups.
Of course, people who live longer will spend more money. The longer you live the more doctor visits you will have, the more food you will eat, the more rent checks you will have to mail. This is not rocket science, nor a surprise.
If the point is that in the end, living longer will cost you more, okay fine, but when the alternative is dying younger, I think the average person is going to be willing to pay.
The Boston College study (apparently) only looks at out-of-pocket costs, not those funded by taxpayers through Medicare. Because higher-income earners live longer, they also are a bigger “burden” on Medicare, which somewhat mitigates their “overpayment” via the payroll tax. This may explain why higher-income people often support “universal” health care.
I am surprised how many thoughtful people have quoted this study on their blogs. The researchers’ main point seems to be if you live longer you will incur higher medical costs than those who die early. Wow.
What’s next for these Einsteins? A study concluding how dangerous beds are because most people die in bed?