March 5, 2012
The age of population is one of the challenges the United States faces. The shift of demographics may have an effect on the needs and services of this particular population. In this paper it will be discussed how the demographics may have an impact on the health care market, how changes will affect health care such as increase in health care cost and increase in prescription drug cost.
General Impact on Health Care Market
Between 2000 and 2050, the number of ageing population will increase by 135% During this time period, the proportion of the population that is over the age of 65 will increase from 12.7% in
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Medicare is a publicly financed and administered, social insurance program. The program operates as an open-ended entitlement to individuals. Financing for hospital and some other services is through a payroll tax of 2.90%. Financing for physician and some other services is through premiums paid by beneficiaries and general revenues. While enrolment in Part B is voluntary, all older people enroll. Medicare expenditures in 2000 totaled $224 billion. Medicare covers a fairly broad range of services, but does not cover prescription drug, dental services, or eyeglasses, and has extensive cost-sharing requirements. The program covers a limited amount of skilled nursing home and home health care (Wiener & Tilly, 2002). Financing for long-term care services, such as nursing home care and home and community-based services, is through a combination of Medicaid, Medicare, state-funded programs, out-of-pocket payments and private insurance. Approximately two-thirds of nursing home residents have their care paid by Medicaid. Federal and state Medicaid long-term care expenditures for older people with disabilities were about $43 billion in 2000, about 0.4% of GDP. Due to the lack of public or private insurance means that out-of-pocket payments account for a large portion of long-term care expenditures (Wiener & Tilly, 2002). The health-care cost per capita for persons aged 65 and higher in the United States and other developed countries is three to five