Costs by Category

Costs were calculated on the basis of seven cost categories, including medical costs, long-term care costs, productivity losses, government assistance programs, entitlement payments, deadweight loss from transfer payments, and other direct costs.

Total costs are dominated by medical costs, productivity losses and long-term care costs, which contribute 47%, 36% and 15% of total costs, respectively.   All other costs combined contribute less than 4% of total costs. Medical costs currently total $69 billion per year, and are projected to increase to total $174 billion by 2050, 2.5-fold increase. Productivity losses will nearly double, from $52 billion to $99 billion by 2050. The cost category with by far the highest rate of growth will be long-term care costs. Driven by the enormous growth of the population aged 90 and older, long-term care attributable to low vision is projected to increase more than four-fold from $22 billion in 2014 to $95 billion in 2050. Our projections anticipate that the cost of government assistance programs will increase by only 36%.

Entitlement program spending by government, which is not included in the total costs, is expected to increase by 130% based on an increase in the eligible population. Deadweight loss will increase commensurately with these transfer payments.   We project other direct costs to patients to more than double from $0.8 billion to $1.7 billion per year in 2050.

 

Figure 4.4.1. Projected Total Costs by Category, 2014, 2032 & 2050

Figure 4.4.1.Projected Total Costs by Category, 2014, 2032 & 2050
Figure 4.4.1. Projected Total Costs by Category, 2014, 2032 & 2050

Figure 4.4.2. Projected Total Costs by Category, $billions

Figure 4.4.2.Projected Total Costs by Category, $billions
Figure 4.4.2. Projected Total Costs by Category, $billions