The economics of extending healthy lifespan

Disclaimer: This page is a general educational explainer. It is not medical, financial, or legal advice. Talk with a qualified professional before making decisions about your health, money, or legal affairs.

The economics of extending healthy lifespan is the study of what it would cost, and what it would be worth, to add years of good health to human lives. A central idea is the gap between lifespan, the number of years a person lives, and healthspan, the number of years lived in good health. A 2024 study by Armin Garmany and Andre Terzic used World Health Organization data for 183 countries and found that the global gap between life expectancy and health-adjusted life expectancy grew from 8.5 years in 2000 to 9.6 years in 2019. The United States had the largest gap of any country studied, at 12.4 years.

Closing that gap has large economic value. In a 2021 paper in Nature Aging, Andrew Scott, Martin Ellison, and David Sinclair estimated that a slowdown in aging that raised United States life expectancy by one year would be worth about 38 trillion dollars, and that a ten year gain would be worth about 367 trillion dollars. These figures measure how much people would value the extra healthy years. They are estimates of willingness to pay, and they are separate from the budgets of governments, insurers, or households. This page explains where the costs and benefits fall and how readers can plan for a longer healthy life.

Healthcare spending

Spending is concentrated in poor health

Healthcare spending is highly uneven. Data from the Medical Expenditure Panel Survey, run by the Agency for Healthcare Research and Quality (AHRQ), show that in 2018 the top 5 percent of people ranked by spending accounted for 48.3 percent of total healthcare expenditures in the United States. The top 1 percent accounted for about 21 percent, while the bottom 50 percent accounted for only about 3 percent. People aged 65 and older were overrepresented in the top spending groups, and inpatient hospital care made up 36 percent of spending for the top 5 percent.

Spending is also concentrated near the end of life. A study by Gerald Riley and James Lubitz of Medicare claims from 1978 to 2006 found that the share of Medicare payments for older people that went to people in their last year of life fell slightly from 28.3 percent to 25.1 percent. After adjusting for age, sex, and death rates, the share showed no significant trend. About a quarter of Medicare spending on older beneficiaries has gone to the last year of life for decades.

These patterns suggest a simple point. Much of the cost of healthcare comes from serious chronic illness, hospital stays, and the final period of life. If people spend fewer years in poor health, some of that spending could shrink or move later.

Compression of morbidity

In 1980 the physician James Fries proposed the idea of compression of morbidity. He argued that if the onset of chronic illness and disability could be postponed faster than the age of death rises, the period of illness at the end of life would become shorter. Under that scenario, people would live most of their extra years in good health, and the costly period of decline would be compressed into a shorter span. The growing healthspan gap reported by Garmany and Terzic shows that, so far, many countries have moved in the opposite direction.

The counterpoint: longer lives can add costs

Healthier aging does not guarantee lower total spending. People who live longer keep using healthcare, draw pensions for more years, and may still need care at the very end of life. Dana Goldman and colleagues used a microsimulation of older Americans to compare treating single diseases with a hypothetical scenario in which aging itself was delayed. Delayed aging added about 2.2 years of life expectancy, most of it in good health, with an estimated economic value of 7.1 trillion dollars over 50 years. The same study found that delayed aging would greatly increase entitlement outlays, especially for Social Security, although changes such as later eligibility ages could offset them.

Why slowing aging differs from treating diseases one by one

Goldman and colleagues found that addressing heart disease and cancer separately would yield diminishing improvements in health and longevity by 2060, mainly because of competing risks. A person saved from one age related disease often develops another soon after. A later summary by the same research group explained that conditions such as heart disease, cancer, Alzheimer disease, and stroke cluster within individuals as they grow older, and that a delayed aging scenario could address this problem. Scott, Ellison, and Sinclair reached a similar conclusion: targeting aging itself offers larger gains than eliminating individual diseases.

Economic effects by age group

Young adults

For young adults, a longer healthy life changes the value of early choices. More healthy years mean more time to earn a return on education and skills, and more time for savings to compound. It also means that a first career is less likely to be the only career. The Stanford Center on Longevity, through its New Map of Life project, calls for lifelong learning and for planning around the transitions to be expected over century long lives.

Midlife

Midlife is often the period of greatest financial pressure. Many people are paying for housing and children while also helping aging parents. The Federal Reserve survey of household well-being for 2024 found that only 35 percent of adults who were not retired thought their retirement savings plan was on track. Better health in midlife can protect earnings and make it easier to retrain or change jobs instead of leaving work early.

Older adults

For older adults, health largely decides whether working longer is a real option. The same Federal Reserve report found that health problems, caring for family, or a lack of work contributed to the timing of retirement for 42 percent of retirees, and for half of retirees with a high school degree or less. When people stay healthy, they can choose later or phased retirement, provide care for others, and do volunteer or part time work. When they are in poor health, retirement timing is often forced on them.

Economic status and public programs

Income differences in longevity

Gains in longevity have been unevenly shared. A 2016 study in JAMA led by Raj Chetty linked tax and death records in the United States and found that the gap in life expectancy at age 40 between the richest 1 percent and the poorest 1 percent was 14.6 years for men and 10.1 years for women. Between 2001 and 2014, life expectancy rose by 2.34 years for men and 2.91 years for women in the top 5 percent of incomes, but by only 0.32 years for men and 0.04 years for women in the bottom 5 percent. This matters for policy design. A rule that raises a pension age for everyone assumes that added years are spread evenly, while the data show they are tilted toward higher earners.

Pensions and Social Security

Public pension systems are sensitive to how long people live. The 2026 Social Security and Medicare Trustees summary projects that the Old-Age and Survivors Insurance trust fund can pay full scheduled benefits until the fourth quarter of 2032, after which continuing income would cover 78 percent of scheduled benefits. If the retirement and disability funds were combined, full benefits could be paid until the third quarter of 2034, with 83 percent payable after that. The Medicare Hospital Insurance trust fund is projected to be depleted in the second quarter of 2033. The Trustees reported that the long term outlook worsened mainly because of lower assumed fertility and lower projected immigration, partly offset by higher estimated death rates after an update of post-pandemic mortality trends. In a pay as you go system, longer lives raise costs unless people also work longer or contributions rise.

Insurance

Insurers price risk based on expected health and survival. Healthier lives tend to lower the risk carried by life insurance, while annuities and long term care coverage must pay out for more years. Health insurers may see lower costs if fewer members reach the high spending groups described above, but they also cover people for more years.

Who pays and who benefits

• Individuals pay through savings, premiums, and out of pocket costs, and benefit most directly from more healthy years, higher lifetime earnings, and more time with family.
• Employers may pay for training, flexible schedules, and health programs, and benefit from keeping experienced workers longer.
• Insurers face shifting risks, with possible savings on health and life coverage and higher costs on annuities and long term care.
• Governments pay for research, Medicare, Social Security, and public health. Goldman and colleagues found that delayed aging would raise entitlement costs but could be offset by policy changes such as later eligibility ages.
• Society as a whole benefits through productivity. Healthy older adults can keep working, volunteering, and caring for others. Scott, Ellison, and Sinclair described the gains from slower aging as very large and argued that the more progress is made, the more valuable further progress becomes.

Practical takeaways

These points are general planning ideas, offered for education only.

Plan for a multi-stage career

The New Map of Life project argues that education, work, and learning should be spread across a longer life instead of packed into the early years. In practice, this can mean budgeting time and money for new skills every decade, building a professional network across age groups, and treating a career change at 45 or 60 as a normal step.

Revisit savings and retirement assumptions

Many retirement plans assume a fixed number of years in retirement. A longer healthy life may call for a plan that tests several lifespans, includes a phase of part time work, and accounts for the possibility of caring for a parent or partner. Because the 2026 Trustees summary projects reduced benefits after reserve depletion unless the law changes, many planners model more than one Social Security scenario. A licensed financial planner can help apply these ideas to individual circumstances.

Focus on health habits with strong evidence

Some habits have broad scientific support. The World Health Organization reports that people who are insufficiently active have a 20 to 30 percent higher risk of death than people who are sufficiently active, and its global recommendation for adults is at least 150 minutes of moderate intensity physical activity per week. The WHO also reports that tobacco kills more than 7 million people each year. Readers should discuss any changes to exercise, diet, or medical care with a qualified clinician.

Futures note

Some researchers and advocates think that progress against aging could one day add healthy years faster than time passes, an idea known as longevity escape velocity. Whether or not that happens, the economic logic on this page applies to smaller gains as well. For more on the biology, see Aging. Earlier proposals on this wiki for local longevity pools are best treated as untested ideas.

See also

• Aging
• Longevity escape velocity
• Anti-aging research
• Biomedical gerontology
• About life extension
• Being healthy
• The aging thought experiment

Discussion questions, essay ideas, and learning related AI prompt ideas

Discussion questions

• Why might slowing aging save more money than curing one disease at a time?
• Should public pension ages rise with average life expectancy when gains differ by income?
• How should employers adapt if workers expect to stay healthy into their seventies?

Essay ideas

• Explain compression of morbidity and assess whether recent data support it.
• Compare the costs and benefits of a longer healthy life for individuals, insurers, and governments.
• Describe how a multi-stage career could change education and retirement.

Learning related AI prompt ideas

• Explain the difference between lifespan and healthspan using the 2024 Garmany and Terzic data.
• Summarize why a small share of people account for about half of healthcare spending.
• Help me draft a list of questions to bring to a financial planner about planning for a longer life.
• Create a simple table comparing delayed aging with disease by disease treatment as described by Goldman and colleagues.