European Commission Directorate-General "Employment, Social Affairs and Equal Opportunities" Unit E1- Social and Demographic Analysis

How much care for older people will be needed? What can policies do to avoid or reduce dependency and to ensure that adequate care will be available? by Cristina Masseria and Elias Mossialos The number of older people is rising in all European countries. Because older people (people aged 65 years and above) consume more health care than the rest of the population, this poses challenges for budget management and for the overall sustainability of health and long-term care expenditures. Longevity has risen everywhere, in particular in the EU15 and further increases in life expectancy are projected in the future. By 2040, one in four persons is expected to be over 65 years, and it seems unlikely that population ageing will be accompanied by corresponding increases in labour market participation. Old-age dependency ratios are indeed expected to increase sharply, especially after 2010 when the post-war baby-boom generation reaches retirement age. To understand how much care for older people will be needed it is important to analyse the relationship between life expectancy and healthy life expectancy. What triggers health and long-term care expenditure is poor health rather than age. Although the probability of being sick increases with age, it is also likely that as life expectancy increases, health status improves due to medical progress, improved living conditions, and healthier lifestyles