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The amount of average Medicare per capita spending on many Medicare-covered services in 2011 generally increased with age for beneficiaries in their 70s and 80s and then began to decline for older beneficiaries; the main exceptions were skilled nursing facility (SNF) and home health per capita spending, which increased for beneficiaries in their 90s before declining, and hospice spending which generally increased with age through the 90s and beyond. In contrast, per capita Part D drug spending was roughly constant among beneficiaries in their 60s, 70s, 80s, and 90s.

  • In 2011, Medicare per capita spending peaked at age 83 for physician and outpatient services, but at older ages for inpatient care (89), home health (96), skilled nursing facility (98), and hospice (104).
  • In 2011, Medicare per capita spending on hospital inpatient services increased more than 2.5 times from $1,848 among 66-year-olds to $4,799 among 89-year-olds before declining among older beneficiaries. While per capita inpatient spending peaks at age 89, spending on inpatient care is relatively similar for beneficiaries between the ages of 84 and 97 (plateauing at around $4,500 per beneficiary).
  • Despite a gradual reduction in Medicare per capita spending for Part B providers, services, and supplies for beneficiaries beginning in their mid to late 80s, per capita spending continues to climb into the mid-90s due to persistent levels of inpatient hospital spending and a sharp rise in skilled nursing facility and hospice spending in the late 80s and 90s. Between ages 86 and 96, Medicare per capita spending on skilled nursing facility services increased by more 50 percent (from $2,043 to $3,149) while per capita spending on hospice tripled (from $706 to $2,299).
  • The relatively high per capita spending among beneficiaries in their mid-to late-90s in 2011 is influenced by skilled nursing facility (SNF), hospice, and (to a lesser extent) home health spending; excluding spending on these services, overall per capita spending peaks at age 89.
  • Inpatient hospital care accounted for the largest share of per capita spending among traditional Medicare beneficiaries ages 66 and older in 2011, with the exception of centenarians for whom hospice spending comprised the largest share of their total Medicare per capita spending. As beneficiaries grow older, per capita spending on physician services accounts for a declining share of per capita costs.

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