Question

1. Suppose that population aging in a given country is due entirely to an increase in life expectancy at age 65, rather than any other cause, and suppose further that Zweifel et al. (1999) are right and the rise in the set of people who are close to death causes higher health care expenditures. Given these assumptions, would you expect per capita health care expenditures to rise or fall in the near future? What about total health expenditures? 2. Suppose that Getzen's finding is accurate, and the reason why population aging is correlated with higher health expenditures is because older populations tend to be richer than younger ones. If that is so, do rising health care expenditures mean higher or lower social welfare? Under these conditions, should pollicymakers be concerned about higher health care expenditures due to population aging?

Suppose that Getzen’s finding is accurate, and the reason why population aging is correlated with higher health expenditures is because older populations tend to be richer than younger ones. If that is so, do rising health care expenditures mean higher or lower social welfare? Under these conditions, should policymakers be concerned about higher health care expenditures due to population aging?

Answer 1

Answer 1:

Since there is rise in the life expectancy in the nation, there will be rise in the per capita health expenditure in the near future. This is because more expenditure is incurred on old people and their medicines. Increase in life expectancy will lead to rise in the per capita health expenditure of the nation. The overall health expenditure will also increase as the number of aged people in the nation rises.

Thus, increase in the life expectancy of a nation will lead to both per capita health expenditure and overall health expenditure of a nation.