The Seven Most Important Demographic Events that Will Influence Medicare in the Future

By S. Jay Olshansky

When Congress signed Medicare into law in 1965, the life expectancy of the U.S. population was 70.2 years, the probability of a baby born in 1965 reaching age 65 was 71.3 percent, and among those who had already celebrated their sixty-fifth birthday in the year Medicare was enacted, 28.1 percent would survive to their eighty-fifth birthday. A century ago, Americans lived only about forty-seven years, and the probability of a baby born in that year reaching age 65 was only 39 percent (Bell and Miller, 2005). On the surface, these statistics are accurate—many Americans are living much longer and healthier lives than at any time in our history, and, for some, there is reason to be optimistic about the future (Olshansky et al., 2009).

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However, the picture that these and other related statistics convey is only part of the story of our past and present. There is a unique “history” behind mortality and survival statistics that provides a full three-dimensional view of the forces that influenced past and current health and longevity attributes of the U.S. population ages 65 and over, and the factors most likely to influence cohorts reaching these ages in the future. The following seven major demographic events will influence attributes of the Medicare population in the future.

Event Number 1

Demography Is Destiny. The number of people surviving into the Medicare age window has risen steadily since 1965, and it will inevitably continue to do so for the next twenty-five years as a result of shifting demographics, and due to declining mortality at middle and older ages. This population’s size will increase by at least 67 percent between now and 2040.

In 1965, the U.S. population was at 194 million. Having risen to 316 million by 2015, the U.S. Census Bureau projects it will rise to 380 million by 2040. The U.S. population was increasing at a rate of 2.4 million per year during the period of 1965−2015, but it is projected to experience an accelerated rate of increase to 2.56 million annually between now and 2040. The largest percentage increases will be in the population ages 65 and older.

The U.S. population also experienced a dramatic demographic shift since the beginning of the twentieth century. Our age structure used to be in the shape of a pyramid, with few people reaching older ages; it now has become rectilinear. By way of illustration, in 1900, the proportion of the U.S. population age 65-plus was 4.1 percent, but this has risen to 14.8 percent today, and will rise to 21 percent by 2040 (Administration on Aging, 2014). The absolute increase in the number of people ages 65-plus and 85-plus also will rise dramatically over the next quarter century (U.S. Census Bureau, 2013). From 2015 to 2040, the age structure of the United States will transform to the permanent shape of a square (or nearly so), with at least as many people alive at older ages as there are at younger ages (see Figures 1 and 2, below). As a result, there will be large and rapid increases in the Medicare-eligible population, at least through mid-century.

Figure 1

Figure 2

Event Number 2

Radical Life Extension Is Highly Unlikely. The probability of surviving to the Medicare age window is unlikely to change much in the coming decades, nor is there likely to be a dramatic improvement in survival to later ages once having reached the age of 65. The former cannot occur because nearly everyone already born survives to age 65, and the latter is unlikely because of the accumulation of lethal risk factors as a function of age.

In 1965, about 71 percent of babies born in that year were expected to reach the Medicare-eligible age of 65 and, by 2015, this rose to more than 84 percent (see Table 1, below). This increase was a byproduct of large reductions in death rates at younger and middle ages. By 2040, survival to age 65 is expected to rise marginally to 87.5 percent, which means the rate of improvement in survival will decelerate rapidly in the coming decades. One explanation for this phenomenon is known as entropy in the life table (Olshansky, Carnes, and Cassel, 1990); that is, it becomes increasingly more difficult to raise life expectancy as it goes up. While survival between the ages of 65 and 85 did in fact increase from 28 percent in 1965 to 50.1 percent today, the Social Security Administration forecasts an increase to only 50.9 percent by 2040 (see Table 1). Another reason for decelerating increases in longevity and survival at older ages in the future is a phenomenon known as competing risks (described in the next section).

Table 1

Life Expectancy at Birth and at Age 65, and Conditional Survival to Ages 65 and from Ages 65 to 85 (United States: 1965, 2010, 2040)
  19651 19651 20402
Life Expectancy at Age 65 14.7% 19.3% 19.6%


12.9% 17.9% 18.4%


16.4% 20.5% 20.9%
Probability of Surviving to Age 65 from Birth 71.3% 84.4% 87.5%


73.9% 80.7% 85.4%


78.9% 88.1% 90.2%
Probability of surviving to age 85 conditional on survival to age 65 28.1% 50.1% 50.9%


20.0% 43.4% 46.0%


35.1% 55.7% 57.6%
1 Human Mortality Database (2014); Retrieved April 15, 2015.
2 Social Security Administration; Retrieved April 15, 2015.

Event Number 3

The Faustian Trade of Worsening Health for Greater Longevity. Modern medical advances will continue, but it is possible that continued success in attacking fatal diseases could expose the saved population to an elevated risk for conditions of extreme frailty and disability.

Competing risks not only will lead to a decelerating rate of improvement in survival up to and beyond Medicare-eligible ages, now that most deaths have been redistributed to the Medicare age window of ages 65-plus, but the price to be paid for extended survival is a dramatic rise in the prevalence of diseases of aging—cardiovascular disease, cancer, Alzheimer’s Disease, dementia, and a suite of non-fatal disabling conditions.

Here’s the dilemma: Now that most deaths occur past the Medicare-eligible age of 65, and given that it is not currently possible to modulate the rate of biological aging, older cohorts today routinely accumulate a broad range of fatal and disabling diseases. The longer we live, the more diseases we accumulate. If we continue with current efforts to extend life (even marginally) by combating only major fatal diseases (taking cardiovascular disease and cancer as our primary targets), we probably will achieve some additional measure of success in reducing case fatality rates for these competing risks. But the price to be paid for success may be an expansion of morbidity and a rise in other competing causes (e.g., Alzheimer’s Disease) that may yield more years of frailty and disability.

Event Number 4

The Importance of Life History. People in the Medicare population, across each of the following eras, have been, and will continue to be, heavily influenced by the environments in which they were born and lived.

The Medicare population in 1965 

Medicare populations of the past, present, and future are byproducts of a very unique set of life history characteristics. For example, almost the entire population ages 65 and older in the year in which Medicare was enacted was born in the nineteenth century. As children, they had scarce access to vaccinations, and most vaccines designed to prevent fatal and disabling diseases we know of today did not exist. Antibiotics had not yet been invented, malnutrition and under-nutrition were common, and infant mortality rates were as high as 35 percent. The primary causes of death were communicable diseases; some behavioral risk factors now known to be harmful (e.g., smoking) were considered “healthy,” and the foundations of public health were just beginning to emerge, and they where they did exist, they were inequitably distributed.

For those fortunate enough to survive their childhood, the early twentieth century brought the hazards of World War I and the 1918 influenza pandemic and, for the survivors, malnutrition and difficult living and working environments plagued this cohort in their adult years. Unforgiving environmental conditions led to early deaths for many children born prior to 1900. Time and the environment acted as a strong sieve through which few members of this birth cohort could pass.

The Medicare population today

The current Medicare population was born between 1905 and 1950. They experienced World War I and the first few years of the post-World War II baby boom. These were the first U.S. generations to have broad access to vaccines for yellow fever, typhus, influenza, and polio (among others). Shortly thereafter, younger members of this generation were vaccinated against measles, mumps, and rubella. Death and disability often resulted from many of these communicable diseases throughout history, but in the modern era, their prevalence declined and survival rates from these diseases improved dramatically. After the Depression, there was widespread food availability, educational attainment improved, and public health enabled most people in this generation access to clean water, sanitation, refrigeration, and indoor living and working environments.

This era also gave rise to harmful conditions: the 1918 influenza pandemic had a profound negative effect, essentially wiping out large population segments of both the young and old. The current Medicare cohort also was characterized by a high and rapidly growing prevalence of some hazardous behavioral risk factors (e.g., smoking). The generation now passing into the age window of 65-plus is, overall, much less “selected” out for early death by harsh environmental conditions, relative to the generation that preceded them at Medicare’s enactment in 1965.

The Medicare population in 2040

The Medicare population in 2040 began at the dawn of the Depression era. They lived through World War II, and the Korean and the Vietnam wars. The vast majority was born between 1955 and 1975. Most of this cohort were vaccinated early in life against communicable diseases. They benefitted in mid-life from unprecedented reductions in cardiovascular disease, they benefitted in mid-life from reductions in cancer fatality rates, and they were the most highly educated birth cohort in American history.

The one major health blemish in this birth cohort, which will reach ages 65-plus in 2040, is that many have succumbed to the rise of adult-onset obesity. Unless this is remedied, there is a high probability that levels of frailty, disability, and complications associated with obesity will dominate up to 50 percent or more of the entire Medicare cohort in 2040—and for many subsequent years.

Event Number 5

The Benefits of High Socioeconomic Status. The wealthy and most highly educated subgroups of the population will probably live longer and healthier lives in the future than they do today.

Measures of health disparities, as we gauge them today, did not exist at the dawn of Medicare in 1965, but Kitagawa and Hauser (1973) demonstrated that income, education, and occupation modulate the dramatic variation in longevity and health that existed within the United States at that time. In 2008, a white female who acquired a college education could expect to live ten years longer than a white female with less than twelve years of education. Relative to someone without a high school degree, a college education is equivalent to taking a pill that cures all cardiovascular diseases and cancer (Beltrán-Sánchez, Preston, and Canudas-Romo, 2008). These disparities in longevity also apply to the population ages 65 and older (Olshansky et al., 2012).

In 2008, the effect of education on the proportion of the population that survived to age 65 was dramatic for all race-sex groups with the exception of Hispanic females (Olshansky et al., 2012). For example, among white males with less than twelve years of education, only 61.3 percent of those reaching age 25 are expected to survive to age 65; by comparison, 91 percent of white males with a college education are expected to reach age 65. Education currently has less of an effect on Hispanic men and women (the longest lived subgroup in the United States today) because of a phenomenon known as the Hispanic Paradox (discussed below).

Event Number 6

Unfavorable Health Profiles Are Visible Now. The poor and middle class live shorter and less healthy lives than the rich and most highly educated subgroups. By 2040, the post-World War II Baby Boom Generation and Baby Bust Generation right behind them will be the dominant forces in the Medicare age window, and the health of these generations has been jeopardized by a dramatic rise in adult-onset obesity.

Crimmins and Saito (2001) demonstrated that just five years after Medicare came into existence, and through 1990, there were varying patterns of healthy life expectancy as a function of race and level of completed education. Overall, healthy life expectancy patterns improved consistently only for those with thirteen or more years of education; there were some improvements for those who completed nine to twelve years of schooling, but among the least educated, there was a decline in such expectancy. For the population ages 65 and older, there were vast differences in healthy life expectancy as a function of completed education, with the most highly educated living several more healthy years relative to the least educated.

The overall health status of the Medicare population in 2040 may be significantly worse off than today’s Medicare population. The population ages 65 and older may live slightly longer than the population of that age today, but it is possible that a substantial proportion of additional survival time that is manufactured through medical technology in the coming twenty-five years will be unhealthy. The reason for this belief is the expected, forthcoming additional inroads against major fatal diseases. That is, life extension brought about by disease reduction may expose the saved population to an elevated risk of other conditions of frailty and disability for extended periods of time.

Three additional factors will exacerbate this scenario. The rising adult-onset obesity epidemic will have a latent effect that will be expressed fully in the Medicare population in 2040 and after; the rising prevalence of second- and third-generation Hispanics, who are less healthy than their parents’ generation, will enter the Medicare age window in 2040. This will have a notable dampening effect on health and potentially lead to a shorter life expectancy and shorter survival after age 65 in 2040 relative to today; and, competing risks will take on an increasingly more important role (evidence for this scenario has already emerged: see Reither, Olshansky, and Yang, 2011).

Medical technology also will generate more effective treatments for diabetes and its complications; personalized medicine will come on line; advances in regenerative medicine will yield new ways to combat the infirmities of old age; and, aging science may discover and successfully disseminate a therapeutic intervention that slows the biological processes of aging.

Event Number 7

The Hispanic Paradox and Medicare. The racial composition of the Medicare population in 2040 will look far different than it does today, with large absolute and percentage increases in the proportion of the U.S. Hispanic population. Given the observed negative health trajectories of second- and third-generation Hispanics, when this generation of younger Hispanics reaches Medicare ages every year between now and 2040, there will be significant upward pressure on levels of frailty and disability, relative to the current Medicare generation.

One of the more interesting developments in shifting American demographics is the anticipated dramatic increase in the Hispanic population, and the unique impact this will have on health and longevity over the next few decades. Details are described in the literature (Hummer and Hayward, 2015; Markides, Samper-Ternant, and Al Snih, 2015), but it now is vital to recognize that the proportion of the total U.S. Hispanic population will rise from 17.1 percent today to 28 percent by 2040. More importantly, Hispanics now represent only 7 percent of the population ages 65-plus, but this will rise to 18 percent by 2040. Neither of these demographic events would be notable ordinarily, except for the fact that Hispanics represent perhaps one of the more interesting anomalies in American demographics.

Hispanics now have the highest life expectancy among the main population subgroups in the country. Hummer and Hayward (2015) have demonstrated that the Hispanic population in United States currently is dominated by first-generation immigrants who are known to have healthier lifestyles than that of their country of origin or of the general U.S. population. However, the health and longevity of this subgroup is on a trajectory to worsen in the coming decades. Why? Because evidence has emerged to indicate that both second- and third-generation Hispanics are experiencing notable declines in health due to the tendency toward increasingly more harmful behavioral risk factors such as smoking and obesity (Hayward et al., 2014).


The seven demographic events described above will have a profound influence on the Medicare population in the United States throughout this century. One thing is for sure: Medicare recipients in 2040 will be far more heterogeneous than any previous generation, and they will survive to older ages with practically no selection pressures, which means the tails of the health distribution will expand dramatically. There will be many more healthy and vibrant older people in the future, matched by large increases in the number of people who will be more frail and disabled than any generation in history.

S. J. Olshansky, Ph.D., is a professor in the School of Public Health, University of Illinois at Chicago, and a research associate at the Center on Aging, University of Chicago, and at the London School of Hygiene & Tropical Medicine, London, United Kingdom.

Editor’s Notes:

The entire Summer 2015 issue of Generations is available on AgeBlog thanks to the generous support of The Benjamin Rose Institute on Aging, Compassion & Choices and Robert Wood Johnson Foundation President's Grant Fund of the Princeton Area Community Foundation. Click here to read more.

This article is taken from the Summer 2015 issue of ASA’s quarterly journal, Generations, an issue devoted to the topic, “Medicare at 50.” ASA members receive Generations as a membership benefit; non-members may purchase subscriptions or single copies of issues at our online storeFull digital access to current and back issues of Generations is also available to ASA members and Generations subscribers at Ingenta Connect. For details, click here.


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