“So much of what we do in economics is sound alarm bells and be the Debbie Downer in the room, but this is actually a really positive story,” Finkelstein says.
Financially, though, it’s not all positive. Longer life expectancies mean more spending for already troubled government programs like Medicare and Social Security—and for older people themselves. Social Security is expected to be insolvent under its current trajectory by 2032.
Expected lifetime Social Security spending was up 14% because of these demographic changes, the study found.
But there’s a silver lining there, too. Women in particular were found to spend less time in the worst morbidity state. And expected Medicare spending was up just 6%—which is less than anticipated with higher life expectancy—largely because people are in better shape at the end of their lives and need fewer health interventions. The amount of time they are expected to spend in nursing homes and with home health aides, the authors say, may even decrease.