Wharton Pension Research Council Working Papers

Document Type

Working Paper

Date of this Version



Health care spending has increased faster than incomes for decades, but the pace slowed materially after the passage of the Affordable Care Act (ACA). Using data from various waves of the Medicare Current Beneficiary Survey we examine what has happened to out-of-pocket health care spending by different income groups of the elderly over time, and how that has affected resources available for other consumption. We find that the slower pace of health care spending from the ACA was particularly beneficial to the elderly, who spend a greater share of income on health care than the nonelderly. We then examine how out-of-pocket spending on health care by the elderly will change going forward, given current projections for health care spending to accelerate again, and show that resources available for other spending may fall appreciably for lower income groups.


Aging, retiree health, healthcare spending

JEL Code

H51, I11, I14, I18

Working Paper Number


Copyright/Permission Statement

The views expressed here represent the views of the authors and do not indicate concurrence either by other members of the Board's staff or by the Board of Governors. All findings, interpretations, and conclusions of this chapter represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2022 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


We are extremely grateful for the excellent research assistance from Sophia Campbell and Nasiha Salwati.

Included in

Economics Commons



Date Posted: 16 August 2022