Population aging will likely lead to increases is health care spending and the ability of governments to support entitlement programs such as Medicare and Medicaid. Dementia is a chronic condition that is especially pertinent because of its strong association with old age and because care for dementia is labor intensive and expensive. Indeed, prior research has found that if current dementia prevalence rates persist population aging will generate very large increases in health care spending for dementia. In this study we considered two alternative assumptions or scenarios about future prevalence. The first adjusts the prevalence projections using recent research that suggests dementia prevalence may be declining. The second uses growth hypertension, obesity and diabetes, and the relationship between dementia and these conditions to adjust future prevalence rates. We find under the first scenario that if the rates of decline in age-specific dementia rates persist, future costs will be much less than previous estimates, about 40% lower. Under the second scenario, the growth in those conditions makes only small differences in costs.
Keywords: Forecasts of health care costs; dementia.