MEDICARE  ENTITLEMENT  AGE 
OFFICE  OF  INSPECTOR  GENERAL 
I 
AUGUST  1993  OEI-07-91-01600  EXECUTIVE  SUMMARY

PURPOSE 
To  assess  the  results  of gradually  raising  the  entitlement  age  for  Medicare  to  67 to 
make  it consistent  with  the  increased  Social  Security  retirement  age  in the 
21st  Century. 
BACKGROUND 
The  Medicare  program  pays  for  medical  expenses  of persons  age  65 or  older  and  for 
the  disabled.  In  1992,  the  Hospital  Insurance  portion  of Medicare  covered  31 million 
aged  and  4 million  disabled  individuals  and  Imade  payments  of $85.0  billion.  The 
Supplemental  Medical  Insurance  portion  covered  33.8  million  individuals,  with 
program  expenditures  of $5(1.8 billion. 
Historically,  Social  Security  and  Medicare  have  been  closely  linked.  one  example  of 
this  is that  both  Social  Security  and  Medicare  established  65 as their  entitlement  age. 
The  Social  Security  Amendments  of  1983  increased  the  age  of entitlement  for  Social 
Security  unreduced  benefits  from  65 to  67 over  the  period  2003  through  2027,  as one 
of several  methods  to  strengthen  the  solvency  of the  Social  Security  Trust  Fund. 
However,  the  age  of entitlement  for  Medicare  remained  unchanged. 
Recent  concerns  about  the  solvency  of the  Medicare  Trust  Funds,  large  deficits  in the 
Federal  budget,  a growing  interest  in reforming  the  nations  health  care  financing 
systems,  and  general  awareness  of  longer  life expectancies  make  it important  to 
reexamine  the  effects  of coordinating  Social  Security  and  Medicare  entitlement  ages. 
METHODOLOGY 
We  conducted  literature  reviews  to  examine  the  relationships  of government 
retirement  and  health  insuranm  systems,  life expectancies,  economic  trends,  and 
factors  which  could  nffect  the  availability  and  utilization  of  health  insurance. 
The  Health  Car-e Financing  Administration  (HCFA)  Office  of the  Actuary  provided  us 
with  projected  Medicare  Hospital  Insurance  Trust  Fund  savings  which  would  result  if 
the  Medicare  entitlement  age  were  gradually  raised  to  67 following  the  same  schedule 
as  the  Social  Security  program.  We  performed  several  analyses  of the  projected 
savings  in  order  to  explain  the  significance  of these  estimates  in todays  dollars. 
We  examined  various  factors  contributing  to  the  uncertainty  of the  projected  savings 
and  analyzed  the  impact  of a higher  entitlement  :~ge on  Medicare  beneficiaries. 
i  FINDINGS 
Gradually  changing  the  Medicare  enticement  age to 67 would  save  ~he Hospital  Ikwrance 
T)-ust Fund  more  than  three quurlen  of u lrillion  dollan  over a 30 year period  beginning 
in the year  2003. 
The  projected  savings  are  $446  billion  for  the  25 year  transition  period, 
years  2003  through  2027.  During  the  five years  immediately  after  full 
implementation  of the  policy,  years  2028  through  2032,  the  savings  would  be 
$324  billion.  The  savings  for  the  30 year  period,  years  2003  through  2032, 
would  be  $770  billion. 
The  annual  savings  would  be  approximately  $65 billion  per  year  in the  years 
immediately  after  the  entitlement  age  reached  67.  In  todays  terms,  this 
amounts  to  between  $4.7  and  $15.7  billion  per  year,  depending  on  the  measure 
used. 
Medicare  Hospital  Insurance  expenditures  would  be  reduced  by 3.4  percent  and 
the  trust  fund  deficit  by 5.() percent  for  the  year  2028. 
The Medicare  Supplementmy  Medical  Insurance  program  would  ako  save  sipificant 
amounts. 
If the  entitlement  age  hnci heen  changed  to  age  67  in  1991,  Supplemental 
Medical  Insurance  savings  would  have  been  $2.4  billion  that  year. 
Estimates  of Jiulure savingf  ure imprecise  due  10 a number  of uncertainties  about  which 
we can  make  only  rough  assump~ions. 
Actual  savings  will depenci  on  future  prices,  utilization  patterns,  work  patterns, 
availability  of employer  provided  insurance,  and  advances  in health  care 
technologies. 
l%e  impact  of raking  the  enlitlemeru  age on fulure  Medicare  bene~ciaries  is not  known. 
Howeve~  provkiing  subs~an~iul advance  notice  OJlhe  change,  as has  been  done  by Social 
Security,  can  reduce  polential  negative  coruequence.s. 
From  our  discussion  of savings,  it is obvious  that  increasing  Medicares 
entitlement  age  woLlld contribute  to  a healthier  Trust  Fund.  This  is not  an 
insignificant  consideration,  in light  of estimates  that  the  Medicare  Trust  Fund 
will  become  insolvent  in  1999. 
However,  other  effects  that  raising  the  entitlement  :lge would  have  on  future 
beneficiaries,  such  as  changes  in their  access  to  needed  medical  services,  are 
difficult  to  preciict.  The  irmpact woLIILiciepend  on  whether  they  work  longer, 
ii  have  access  to  other  insurance,  or  delay  health  care  until  they  are  entitled  to 
Medicare. 
If enacted,  this  change  woLIld have  to  take  into  account  alternative  sources  of 
financing  that  woLJld be  available  to  those  who  would  be  denied  Medicare 
coverage.  Furthermore,  a phased-in  transition  which  parallels  Social  Securitys 
is essential  if such  a change  is adopted.  This  would  ensure  that  those  affected 
would  have  appropriate  advance  warning  of the  change  in time  for  them  to 
make  alternative  health  insurance  arrangements. 
... 
Ill  TABLE  OF  CONTENTS

PAGE 
EXECUTIVE  SUMMARY 
INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..1 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - . . . ...-...8 
.  30 Year  Hospital  Insurance  Savings

Annual  Savings

 
.  Savings  as  a Percent  of Expenditures

Savings  as  a Percent  of Deficit

 
Supplemental  Meciical  ]nsurdnce  Savings

 
Uncertainties  of Savings  Estimates

 
Impact  onBeneficiaries

 
APPENDICES

khngevity  Increases  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-1

B:  Savings  Projection  s.....  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-l

C  Annual  Deficits  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..C-l

D.  Bibliogmphy  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  D-l
 INTRODUCTION

PURPOSE

To  assess  the  results  of gradually  raising  the  entitlement  age  for  Medicare  to  67  to

make  it consistent  with  the  increased  Social  Security  retirement  age  in the

21st  Century.

BACKGROUND

The  Social  Security  Act,  [Public  Law  (P. L.)  74-271],  and  related  laws  established  a

number  of  Federal  programs,  including  Social  Security  Retirement  Insurance  benefits

and  the  Medicare  program.

The  Retirement  Insurance  benetits  program  (Social  Security)  insures  and  provides

monthly  benefits  (unreduced  if taken  at  age  65)  to  individual  and  their  dependents

when  the  individual  retires  or  redL]ces their  income  to  levels  that  permit  these

payments.  The  benefits  are  funded  through  the  tax  contributions  paid  by employers,

employees,  and  self-employed  individuals.

The  Medicare  program  is a health  insurance  program  that  provides  payments  for

medical  expenses  incurred  by Social  Security  retirees  ages  65 or  older,  some  disabled

beneficiaries,  and  for  some  other  individuals  with  chronic  life-threatening  illnesses.

The  Medicare  prograln  is administered  by the  Health  Care  Financing  Administration

(HCFA).  Medicare  paylnents  are  funded  through  taxes  paid  by employers,  employees,

and  self-employed  individuals,  with  some  funding  from  general  revenues.  Additional

funding  is obtainecl  through  monthly  medical  insurance  premiums  paid  by Medicare

beneficiaries  who  elect  this  coverage.

The  Medicare  program  has  two  parts.  Hospital  Insurance,  or  Part  A,  and

%pplementary  Medical  ]nsurance,  or  Part  B.

The  Hospital  Insurance  program  pays  for  inpatient  hospital  services,  inpatient  care

provided  in skilled  nursing  facilities,  home  health  care,  and  hospice  care.  Program

Trustees  reported  that  in Calendar  Year  1992,  approxi]nately  31 million  aged  and

4 million  disabled  individuals  were  covered.  In  1992,  total  incolme  was  $93.8  billion

while  expenditures  were  :lpproximately  $85.() billion.

The  Supplementary  Medic:~l  [nsurance  program  pays  for  physicians  services,

outpatient  hospital  services,  ciurable  medical  equipment,  laboratory  services,  and  other

medical  services  and  supplies.  Program  Trustees  reported  that  in  1992,  approximately

33.8  million  individuals  were  covered.  Income  in  1992 was  $57.2  billion

(or  $57.3  billion  rounding  individual  income  amounts).  General  revenues

1
 provided  $41.4  billion  or  72.3  percent  of this  income.  Premiums  paid  by enrollees 
provided  another  $14.1  billion  or  approximately  24.6  percent  of the  income  for  1992 
and  the  remaining  $1.8  billion  or  3.1 percent  was  from  accumulated  interest  and  other 
income.  Expenditures  for  1992 were  approximately  $50.8  billion. 
Establishing  65 as the Entitlement  Age: 
For Social  Securily 
Otto  von  Bisrnarck  of Germany  is general]y  recognized  as  establishing  the  first

compulsory  old-age  insurance  program.  That  program  established  70 as  the

retirement  age.  This  was  later  reduced  to  age  65  in  1916.  Britain  followed  suit  in

1925  by  establishing  65 as  its  program  retirement  age.  A  1935  survey  of State  old-age

insurance  laws  showed  that  29 out  of 42 States  (69  percent)  selected  65 as  the

eligibility  age  for  their  pensions.  The  Social  Security  Act,  enacted  in  1935,  established

65 as  the  normal  retirement  age.  In addition,  The  Railroad  Retirement  Act

(P.L.  73-485)  enacted  in  1934  and  subsequent  legislation,  used  65 as the  retirement

age.

Our  research  shows  that  the  original  selection  of 65 for  the  %cial  Security  retirement

age  was  somewhat  arbitrary.  in  the  1930s, the  planners  of Social  Security  considered

the  retirement  age  of 65 to  represent  a good  compromise  between  the  higher  costs

associated  with  paying  benefits  at  age  60,  and  the  limited  eligibility  for  these  benefits

which  would  occur,  due  to  shorter  life  spans,  if age  70 was  selected.

For Medicare 
In  the  1930s  the  Presidents  acivisors  considered  establishing  a Federal  health 
insurance  program  as  purt  of the  Social  Security  legislation.  However,  due  to 
significant  Congressional  opp~~sition  to  this  proposal,  health  insurance  coverage  was 
not  included  in the  Social  Security  legislation. 
In  the  next  three  decades,  Congress  considered  various  legislative  proposals  for  some 
form  of  Federal  health  insurance  coverage.  Health  insurance  bills  were  submitted  in 
the  1960s  to  cover  medical  expenses  for  elderly  individuals. 
.	 In  1961,  the  Forand  hill was  introduced  in Congress.  This  bill  proposed 
Federal  health  insurance  of  hospital  and  nursing  home  expenses  incurred 
old-age  benefici~lries. 
.	 In  1963,  the  King-Anderson  bill was  introduced  in Congress.  This  bill  sought  to 
provide  hospital  and  related  services  to  aged  beneficiaries  covered  under  the 
Social  Security  system.  The  Congressional  hearings  on  this  legislation 
established  that  65 should  be  the  age  of entitlement  for  these  benefits.  No  ages 
above  65 were  discussed.  Entitlement  ages  below  65 were  discounted  because 
a lower  age  woLlld include  too  lmnny individuals  who  were  still  working.  (cid:1) In  1965,  Congress  en:~cted  Health  Insurance  forthe  Aged  legislation  [Medicare 
(P.L.  W-97)].  Ourreview  of C(Jngl-ession:~ lcommittee  reports  shows  that 
entitlement  ages  other  th:tn  65 were  not  seriously  considered.  The  hearings 
included  discussions  that  workers  generally  retire  at  age  65 and  are  then  in 
need  of the  basic  protection  that  would  be  provided  in  the  proposed  Medicare 
legislation. 
Legidalion  Increasing  lhe Social  Secunly  Retirement  Age 
In  the  early  1980s  the  Social  Security  Trust  Fund  was  rapidly  depleting  its  resources 
to  pay  benefits.  The  President  established  the  National  Commission  on  Social  Security 
Reform.  This  hi-partisan  Commission  issued  a report  in January  1983  to  the  White 
House  and  to  Congress.  The  report  recommended  the  gradual  increase  in the  Social 
Security  retirement  age.  Factors  cited  by Commission  members  include: 
older  workers  will  be  in greater  demand  in future  years; 
 
the  ratio  of younger  workers  to  retirees  will decline  after  the  turn  of the 
(cid:1)
century,  causing  significant  increases  in taxes.  An  increased  age  (for  Social 
Security  entitlement)  would  reduce  this  burden;  and 
(cid:1) future  beneficiaries  can  adjust  to  an  increased  age  (for  Social  Security 
entitlement)  if they  are  given  sufficient  notice. 
In  1983,  Congress  enacted  the  Social  %curity  Amendments  of  1983  (P.L.  98-21),  which 
instituted  a number  of  measures  to  strengthen  the  solvency  of the  Social  Security  Trust 
Fund.  One  of these  measures  was  to  increase  the  retirement  age  over  the  period 
2003  through  2027  for  unreduced  monthly  benefits  (Table  1). 
Table  1 
SCHEDULE  FOR  INCREASING  SOCIAL  SECURITY  RETIREMENT  AGE
E::- -----
=1:.......  .!.F~lR~t!!irniritAi{::I:EtiveDtes 
,~s-:ri~-~~ri~n~h~---l
r~---0-1--/-02 /38  - 01/01/39- -- ~65  03/02/03  - 03/01/04
01/02/39  - 01/01/40  ~65 yrs  and  4 months  05/02/04  - 05/01/05 
... ..... 
01/02/40  - 01/01/41  ~65 yrs  and  6 lmonths  07/02/05  - 07/01/06
.1 --- ...  ______________ 
01/02/41  - 01/01/4;  --- 65 yrs  and  8 months  09/02/06 - 09/01/07 
___  .. ....E 
01/02/42  - 01/01/43  65 y-s  and  1() months  .  I  11./_0_2:/07  - 11/01/08
01/02/43  -01 /01/55  66 yrs  , 01/02/09  - 01/01/21 
01/02/55  - 01/01/56  ~66 yrs  and  2 months  ~03;02/21  - 03/01./22
-....  ...<... _. 
~ 
01/02/56  - 01/01/57  I 66  yrs  and  4 months  j  05/02/22  - 05/01/23
..L
3
 SCHEDULE  FOR  INCREASING  SOCIAL  SECURITY  RETIREMENT  AGE 
k:::==::FFcE~T:G;cGe-::  Hective  Dates 
IL01-/0-2/-57- -- 01/01/58  -- ---i$::s-r:nn(=i~   -1070223-07I0124 
IL01/0-2-/58- ---0-1/-01-/5-9 ------i-- Snnon  ~09/02/24  - 09/01/25  I
----k--------  --------- [ 
l~:---~--y:~~~monthsths 1102-1215012 I 
01/02/60  and  later  ~G7  yrs  01/02/27  and  later 
....   
This  change  was  made  in recognition  of two  primary  factors: 
  people  are  living  longer- (Appendix  A,  Chart  1), and 
8	 increasing  the  retirement  age  would  provicie  for  the  financial  integrity  of the 
program. 
During  consideration  of this  legislation,  the  Senate  proposed  an  amendment  that 
would  have  shifted  the  age  of eligibility  for  Medicare  in tandem  with  the  increased 
Social  Security  retirement  age.  The  Senate  report  stated,  The  minimum  age  for 
eligibility  for  Medicare  benefits  woLlld continue  to  be  tied  to  the  age  at which 
unreduced  retirement  benefits  are  first  available.  This  amendment  was  not  adopted; 
therefore,  no  change  was  made  to  the  eligibility  age  for  Medicare  benefits.  However, 
this  amendment  proposal  did  affirm  the  belief  by some  members  of Congress  that 
there  is a historical  relationship  between  the  eligibility  age  for  Social  Security  and 
Medicare  benefits. 
METHODOLOGY 
Literature  Review 
We  researched  the  legislative  history  of the  Social  Security  and  Medicare  entitlement 
ages.  We  also  conducted  literature  reviews  to  learn  about  the  relationships  ofi 
government  retirement  and  health  insurance  systems,  both  foreign  and  domestic;  life 
expectancies;  economic  trends;  and  factors  which  could  affect  the  availability  and 
utilization  of  health  insurance. 
HCFAs  Acluuriul  Projection 
At  our  request,  and  working  in consultation  with  our  office,  the  HCFA  Office  of the 
Actualy  provided  us with  projected  Medicare  Hospital  Insurance  Trust  Fund  savings 
which  would  result  if the  Meciicare  entitlement  age  was  made  to  correspond  to  the  age 
of entitlement  to  full  Social  Security  benefits.  This  projection  takes  into  account  such 
factors  as:  reimbursements  rates  for  aged  insured  beneficiaries;  the  size  of the 
4
 population  whose  benefits  would  be  delayed;  health  care  utilization  rates;  increasing

medical  costs;  and  average  hourly  earnings  increases.

The  Actuarys  estimate  covers  ye:~rs 2003  through  2032,  Years  2003  through  2027  are

the  transition  years,  during  which  the  Medicare  entitlement  would  be  gradually

increased  if it followed  the  same  schedule  as the  age  of entitlement  for  full  Social

Security  benefits.  At  the  beginning  of year  2027,  the  entitlement  age  would  reach

age  67;  no  further  increases  wou]d  occur  after  that  date.  The  years  2028  through  2032

make  up  the  five  year  period  immediately  following  this  transition  period.

Appendix  B,  Charts  2 and  3 provide  a comparison  between  expenditures  reduced  by

the  projected  savings  and  expenditures  under  current  law,  and  a summary  of Hospital

Insurance  Trust  Fund  savings  for  the  30 year  period.  Appendix  C, Charts  8 and  9

reflect  Trust  Fund  expenditures  and  income,  and  compare  the  Trust  Fund  deficit

under  the  current  law  and  the  age  67  proposal  for  the  years  2028  through  2032.

Portraying  Savings  in  Today k Terms 
Because  the  gradual  change  in the  retirement  age  and  the  associated  actuarial

estimates  span  a period  ot 30 years  which  ends  39 years  from  now,  and  because  the

savings  are  large,  it is difficult  to  grasp  the  signific:~nce  of the  amounts  calculated.  We

therefore  performed  several  analyses  to  describe  the  results  in todays  terms  and  to

gain  additional  perspective  regarding  the  consequences  of the  change  in entitlement

age.  The  results  are  expressed  as a range  of estimates,  reflecting  the  following

concepts  and  methods.

Conslanl  Dollms  -- First,  we  noted  that  the  Actuarys  projections  were  based  on 
current  dollars.  We  converted  the  annual  savings  to  constant  dollars  using  the 
Consumer  Price  Index.  The  rate  averaged  3,92  percent.  The  results  are  found 
in Appendix  B, Chart  4. 
Todays  Prices  -- Second,  we  know  that  medical  costs  generally  outstrip  the 
Consumer  Price  Index.  For  this  reason,  the  Actuarys  projections  used  the 
Prospective  Payinent  System  mnrket  basket  rate  and  health  industry  wage 
increases  to  approximate  health  care  inflation.  The  total  average  annual  price 
increase  included  in the  Actuarys  estimates  is 5,09  percent.  We  therefore  used 
this  rate  to  calculate  the  value  of  the  Actuarys  projected  savings  at  todays 
prices.  The  result  is found  in Appendix  B, Chart  5. 
Presenl  Value  -- Third,  we  recognize  that  the  time  value  of  money  may  be 
affected  by factors  other  thnn  general  inilation  or  specific  price  increases.  For 
example,  economists  adwxate  considering  the  so  called  present  value  of 
future  cash  streams  by taking  into  account  the  interest  that  could  be  earned  by 
investment.  The  general  practice  is to  reduce  future  dollar  amounts  to  a 
present  value  which  if invested  today  woLlld grow  to  that  future  amount.  A 
private  business  c:ln  perf(>rm  this  calculation  by using  an  interest  rate  at  which 
5
 it can  invest  its  money  today.  Economists  generally  agree  that  a similar 
adjustment  should  be  made  in analyzing  government  savings  and  expenditures, 
but  there  is no  consensus  on  the  rate  that  should  be  used.  We  decided  to  use 
the  rate  of  interest  projected  to  be  earned  by the  Medicare  Trust  Funds.  This 
rate  averaged  6.32  percent.  The  result  is found  in Appendix  B, Chart  6. 
Current  Po&T  -- Fourth,  to  gain  additional  perspective  regarding  the  savings  in

todays  terms,  we  prepared  our  own  analysis  of the  number  of Medicare

beneficiaries  aged  65 and  66 and  calculated  the  Medicare  Hospital  Insurance

payments  made  on  their  behalf  in  1991.  Our  data  was  taken  from  the  HCFA

1991  Common  Working  File,  one  percent  sample  (1992  data  was  not  available).

our  calculations  show  how  lmuch  money  would  have  been  saved  by the

Medictire  Hospital  Insurance  prog-aln  if the  Medicare  entitlement  age  was

raised  to  age  67  in  1991.  We  recognize  that  this  method  does  not  take  into

account  the  increase  in the  number  of  Medicare  beneficiaries  in future  years,

which  woLlld increase  the  estimated  savings.  Our  estimate  is intended  purely  as

a very  rough  approximation  of the  financial  ilmpact  of the  entitlement  age

change  in terms  that  can  be  appreciated  now.

Savinxs  as a Percentage  of Expenditures  -- We  obtained  from  the  HCFA  Actuary

their  estimates  of total  Medicare  Hospital  Insurance  expenditures  under  current

law  during  the  30 year  projection  period  based  on  the  same  factors  which  they

used  in calculating  savings.  This  allows  L]Sto  express  the  savings  as  a percent  of

expenditures,  another  way  to  gain  perspective  in coming  to  grips  with  large

dollar  almounts  in the  ciistant  future  (Appendix  B, Chart  7).

We  performed  a silmilar  analysis  of  1991  expenditures  for  Medicare

beneficiaries  aged  65 and  66.  While  we  noted  above  that  our  method

understates  total  dollar  savings  because  it ti~ils to  take  into  account  the  increase

in the  beneficiary  population,  it seems  to  overstate  the  percentage  of savings

for  the  same  reason--it  does  not  take  into  account  the  increased  use  of

Medicare  reimbursed  health  services  by beneficiaries  over  the  age  of 67 in the

distant  future.  Still,  it gives  us another  view  concerning  the  significance  of

changing  the  entitle  lnent  <ige.

These  analyses  pr(wide  a range  ~~tt(~urestimates  of the  annual  savings  resulting  from 
raising  the  Medicare  entitlement  age  to  67,  and  two  estimates  of the  Medicare 
Hospital  Insurance  Trust  Fund  savings  as  a percentage  of expenditures. 
Supplemenla[  Medica[  Insurance  Tnst  Fund 
The  HCFA  Actuary  did  not  make  long  range  projections  for  the  Supplemental

Medical  Insurance  Trust  Fund.  We  therefore  made  our  own  estimate  of  savings  for

this  program  using  the  technique  described  above  for  the  Hospital  Insurance  program.

That  is, we  calculated  the  amount  of  Medicare  Supplemental  Medical  Insurance

6
 payments  macleto  beneficiaries  aged65  and66during  1991  (1992  data  was  not 
available).  This  was  based  on  the  one  percent  sample  of the  Common  Working  File. 
Uncertainly  AnuZYsiv 
In  addition  to  putting  future  cash  flows  in todays  perspective,  using  a range  of 
estimates  serves  another  purpose  as well.  Projections  made  Pzr into  the  future  are 
extremely  uncertain.  Presenting  the  results  as a range  rather  than  a single  amount 
reminds  the  reader  of the  inherent  uncertainty  of such  projections.  In  the  Findings 
section  of  this  report,  we  also  describe  a number  of factors  which  cannot  be  accurately 
predicted  but  which  can  greatly  affect  the  savings  achieved  by increasing  the 
entitlement  age. 
Impact  Analysis 
Changing  the  Medicare  entitlelnent  :Ige would  have  significant  impact  on  Medicare 
financing.  It could  also  affect  the  health  care  prwctices  and  finances  of  Medicare 
beneficiaries.  Based  on  our  ongoing  research  and  studies  of  Medicare  and  health 
financing  policies,  we  identified  some  of these  impacts.  They  are  briefly  discussed  in 
the  Findings  section  of  the  repc~rt, 
We  did  not  address  the  potential  i!mpact  that  a change  in the  Medicare  entitlement 
age  could  have  on  other  programs  sU~h as Supplemental  Security  Income  and 
Medicaid.  However,  there  could  be  an  impact  on  these  programs  if individuals  of 
limited  financial  means  find  themselves  in need  of  health  car-e coverage  and  assistance 
income  during  those  months  before  they  become  entitled  to  Medicare. 
our  review  was  conducted  in accorctance  with  the  Quulily  Standards  for  Inspection.s 
issued  by  the  Presidents  Council  on  Integrity  and  Efficiency. 
7
 FINDINGS

Gradually  changing  the  Medicare  entitlement  age  to  67 would  save  the  Hospital

Insurance  Trust  Fund  more  than  three  quarters  of a trillion  dollars  over  a 30 year

period  beginning  in the  year  2003.

According  to  the  actuarial  projection,  gradually  changing  the  Medicare  entitlement  age

to  67,  following  the  sa[ne  schedule  mandated  under  current  law for  the  age  of

entitlement  to  full  Social  Security  benefits,  would  reduce  Medicare  expenditures  for

the  Hospital  Insurance  program  by $446  billion  during  the  25 year  transition  period,

years  2003  through  2027.  During  the  five  years  immediately  after  full  implementation

of the  policy,  years  2028  through  2032,  the  savings  would  be  $324  billion.  The  savings

for  the  30 year  period,  years  2003  through  2032,  would  be  $770  billion.

While  there  are  other  options  available  for  a transition  period,  such  as  a shorter

period  than  25 years,  for  reasons  discussed  in the  background,  we  have  tied  our

projections  to  the  %cial  Security  age  and  transition  period.

The  annual  savings  would  be  approximately  $65  billion  per  year  in the  years

immediately  after  the  entitlement  age  reached  67.  In  todays  terms,  thk  amounts  to

between  $4.7  and  $15.7  billion  per  year,  depending  on  the  measure  used.

In  the  year  2028,  the  first  year  after  the  entitlement  age  reached  67,  Medicare

Hospital  Insurance  expenditures  would  be  reduced  by $60.3  billion.  Five  years  later,

in the  year  2032,  this  would  rise  to  $67.4  billion.  To  better  understand  the  significance

of these  amounts,  the  f~~ll(nving statements  express,  in varying  ways,  the  annual  savings

in  todays  terms.

Corz.rlunl Do&Ks.  Eliminating  the  effects  of genera]  inflation,  the  annual  savings 
would  be  $15,7  billion. 
Todav.s F7ice.s.  Eliminating  the  effects  of  medical  inflation,  the  annual  savings 
would  be  $10.6  billion. 
Present  Value.  The  present  value  of annual  savings,  based  on  the  average  rate 
of  interest  for  the  Hospital  Insurance  Trust  Fund  would  be  $7.1  billion, 
Currenl  Policy.  li the  age  of entitlement  ha~i been  changed  to  67 in  1991,  the 
Hospital  insurance  Trust  Fund  would  have  saved  $4.7  billion  that  year. 
s  Medicae  Hospital  Insurance  expenditures  would  be  reduced  by 3.4  percent.

The  $60.3  billion  saved  in the  year  2028  is 3.4 percent  of the  estimated  $1.8  trillion

which  would  be  expended  by the  Medicare  Hospital  program  if the  entitlement  age

remains  at  65.

The  Medicare  Hospital  lnsurmce  deficit  would  be  reduced  by 5.0  percent.

We  have  calculated  the  projected  deficit  in the  five years  after  the  transition  period

before  and  after  applying  the  projected  benefit  savings  (Appendix  C,  Chart  9).  The

percentage  of savings  decreases  fro[m 5.0  percent  in 2028  to  4.3  percent  in 2032,  due

primarily  to  the  rapid  growth  in the  deficit  from  $1.19  trillion  in 2028  to  $1.64  trillion

in  2032.

The  Medicare  Supplementary  Medical  Insurance  program  would  also  save  significant

amounts.

As  noted  in the  Meth~xiolc)gy  section,  the  HCFA  Actuary  did  not  make  projections  of

the  Medicare  Supplementary  Meciic:ll  Insurance  Trust  Fund  expenditures  that  would

result  from  a change  in entitlement  age.  However,  we  calculated  that  if the

entitlement  age  had  been  changed  to  age  67  in  1991,  Supplelnental  Medical  Insurance

savings,  including  a small  number  of disabled  beneficiaries,  would  have  been  $2.4

billion  or  6.3  percent.

Estimates  of future  savings  are  imprecise  due  to  a number  of uncertainties  about

which  we  can  make  only  rough  assumptions.

Estimating  the  financial  effects  of todays  decision  on  program  costs  34 years  hence

requires  that  we  make  a  nulnber  of :lssumptions  about  future  beneficiaries  use  of

medical  services,  their  future  :lccess  to  private  insurance,  and  the  future  costs  of

medical  care.  For  example,  the  nl~~del prepared  by HCFAS  Office  of the  Actuary,

discussed  above,  assumes  that  beneficiaries  will use  services  in  patterns  similar  to

todays;  that  most  beneficiaries  will continue  working  and  purchase  employer  group

health  insurance  until  they  become  eligible  for- Medicare,  but  some  will become

uninsured;  and  that  costs  of  medical  care  will rise  at  moderate  rates  throughout  the

period.  While  we  believe  these  to  be  reasonable  assumptions,  different  conclusions

would  lead  to  different  estimates.  For  example:

.	 If older  Americans  lose  access  to  affordable,  employer-provided  health 
insurance  as  a  result  of early  retirement,  they  might  forgo  preventive  care  and 
delay  needed  services  until  they  became  Medicare  entitled.  Costs  to  the 
program  wou]d  increase  as  beneficiaries  entered  the  program  in poorer  health 
and  in  need  of services  which  had  been  delayed.  .	 If health  care  costs  rise  at  rates  far  above  the  Consumer  Price  Index  or 
Prospective  Paylment  System  market  basket  rate,  the  program  would  save  more 
than  wevec:llcul:~ted  by not  coverin  gthoseag,e  d65and66. 
.	 Advances  in  medical  technology  might  have  an  effect  on  our  estimates  as well. 
For  example,  ne\vtechn(~l(>gies  tc)detect  ~lndsuccessfully  treat  diseases  might 
create  healthier  65 and  66 year  olds  who  use  fewer  services  than  their 
counterparts  today.  In this  case,  the  program  would  save  less  than  weve 
estimated  by not  covering  this  groLlp.  On  the  other  hand,  demand  might 
increase  for  new  high  technology  services  by 65 and  66 year  olds,  and  Medicare 
would  save  more  than  weve  estimated  by not  covering  this  group. 
	 Coverage  policies  will also  have  an  effect  on  our  estimate.  If Medicare 
coverage  policies  are  more  generous  than  private  insurance  policies, 
beneficiaries  Imight delay  some  care  until  they  become  Medicare  eligible  and 
the  services  are  covered,  Our  projections  would  then  be  overestimated,  since 
the  elderly  w[~uld simply  defer  their  health  care  consumption  until  older. 
The  impact  of raising  the  entitlement  age  on  future  Medicare  beneficiaries  is not 
known.  However,  providing  substantial  advmce  notice  of  the  change,  as  has  been 
done  by Social  Security,  can  reduce  potential  negative  consequences. 
Increasing  Medicares  entitlement  age  would  contribute  to  a healthier  Trust  Fund, 
even  though  the  effect  on  the  projected  deficit  is modest.  Clearly  this  change  would 
not,  in  and  of itself,  solve  the  fiscal  crisis  facing  the  program.  Any  steps  that  can  be 
taken  now,  however,  to  begin  to  adciress  the  pr-ojecteci  financial  shortfalls  in the 
program  would  help  beneficiaries  by ensuring  the  solvency  of the  program  and 
potentially  reduce  the  need  to  call  for  increased  contributions  from  beneficiaries  or 
taxpayers  to  keep  the  program  fiscally  sound.  On  the  other  hand,  other  considerations 
might  argue  against  making  such  a change.  A  healthier  Trust  Fund,  while  not  an 
insignificant  benefit,  might  be  outweighed  by potential  negative  effects  on 
beneficiaries.  For  example,  would  beneficiaries  have  access  to  other,  comparable 
health  insurance  at  ages  65 and  66,  prior  to  entering  the  program?  If not,  would  they 
delay  seeking  and  receiving  needed  health  care  daring  this  time?  Would  the  States 
then  face  adciitional  costs  of caring  for-or  insuring  these  older  Americans?  Would 
hospitals  face  larger- uncompensated  care  burdens? 
The  responses  to  these  qucsti[~ns  can  (~nly be  speculative.  This  is particularly  true, 
since  both  the  phased  in Sc~ci:~l%curity  entitlement  age  change  and  health  care 
reform  efforts  will  almost  certainly  affect  employment  patterns  and  older  Americans 
access  to  private  health  insurance  at  affordable  prices.  For  example: 
	 Older  Americans  lmight choose  to  delay  retirement  to  an  older  age  in the 
future,  in  light  of the  change  in Social  Security  entitlement  age  and  the  fact  that 
Americans  are  living  longer  (Appendix  A,  Chart  1).  Consequently,  they  may 
continue  to  be  covered  under  their  elnployers  health  plan  until  they  become 
10
 eligible  for  Medicare.  Older  Americans  might  also  feel  forced  to  continue 
working  in order  to  remain  eligible  for  their  employers  group  health  plan. 
.	 Older  Americans  may  continue  toretire  prior  to  becoming  eligible  for  Social 
Security,  as  they  have  in the  past.  Upon  retirement,  they  might  continue  the 
employers  group  health  plan,  forego  private  insurance,  or  choose  a modest 
insurance  package. 
	 People  may  delay  seeking  needed  care.  This  could  result  in increased  costs 
once  medical  attention  is sought,  as well  as  personal  suffering  by the 
beneficiary.  Older  Americans  might  also  seek  and  receive  needed  care,  but  be 
unable  to  pay  for  it, thus  creating  financial  pressures  on  States  through  the 
Medicaid  program  or  other  State  program  for  the  uninsured,  and  providers. 
If enacted,  this  change  would  have  to  take  into  account  alternative  sources  of financing

that  would  be  available  to  those  who  would  be  denied  Medicare  coverage.

The  amount  of advance  notice  provided  of  the  change  would  also  affect  whether

negative  consequences  to  older  Americans  would  arise.  Without  advance  notice,  older

Americans  would  be  unable  to  plan  for  their  health  care  needs  and  costs  during  the

years  that  would  no  longer  be  covered  by  Medicare,  A  phased  in transition,

paralleling  the  transition  to  an  older  entitlement  age  for  Social  Security,  would  allow

older  Americans  time  to  plan  for  their  health  care  needs  and  expenses  and  help  avoid

undesirable  consequences.

11
 APPENDIX  A

LONGEVITY INCREASES

In  1980,  the~~ver~~ge life  expectancy  forpersons  whohadattained  age65  was79  years 
for  males  and  83.4  years  for  felmales.  By the  year  2000,  this  is expected  to  increase  to 
80.4  and  84.4  years  respectively,  Chart  1 demonstrates  the  gradual  increase  in life 
expectancy  for  males  and  females  that  attain  age  65 through  the  year  2070. 
Chart  1 
Projected  Life  Expectancy  in  the  U.S 
For  Persons  Who  Attain  Age  65 
2070 
sex 
2060  ~  Females 
m 
MaIes 
~  2040 
22020 
-% 
3 2000 
4 
g  1980 
1960 
1940 
Projected  Life  Expectancy 
source  The  1!)93Annual  Report  of the Board of ~rustms 0[ the Federal  O1d-Agc and Survivors  Insurdnce  Fund and the 
Federal  Disability  Insurmcc  Trust  l~und 
A-1
 APPENDIX  B

SAVINGS PROJECTIONS

In  conjunction  with  our  office,  the  HCFA  Office  of the  Actuary  projected  the  Hospital 
Insurance  Trust  Fund  expenditumsand  savings  resulting  from  gradually  increasing  the 
Medicare  entitlement  age  to  67 on  the  same  schedule  as  the  age  of entitlement  for 
unreduced  Social  Security  benefits.  The  base  year  used  in calculating  the  savings  was 
1990,  themost  current  data  avaik~ble.  Theresults  areshown  in Charts  2and3. 
Chart  2compares  the  projected  expenditures  under  current  lawandthe  proposed  age 
67 entitlement  provisions.  Correspondingly,  Chart  3projects  the  Hospital  Insurance 
Trust  Fund  savings  through  2028,  and  for  the  subsequent  5 years. 
Chart  2 
Comparison  of  Projected  HI  Trust  Fund  Ex :penditures 
Proposal  versus  Current  Law 
2600  - --- . 
=    . 
E~---;i[i[ 
,~j~_j~#~:v[T 
f:iiiBMli[BBlll![llllilli1~  i 
03040506070  S09101112  1314151617181920212223  242526272  S29303132 
Calendar  Years  2003  - 2032 
Source  Dcpmlmcnl  of  1Icallh  and  I Iuman  Services,  I kxllli  Cm  [financing  Adminislrdtion,  oflkc  Oflhc Actuiuy 
B-1  Chart  3 
Projected  HI  Trust  Fund  Savings 
Achieved  By  Increasing  the  Entitlement  Age 
E===== 
h  10 
?? 
*O 
03040  S060708091011  1213  141 S16171S  192021222324252627282930 
Calemdas- Years  2003  - 2032 
Source  The  Dcparimcnt  of I Icallh and I Iumi:n Services,  Office  of hspwlor  (kncral 
Based  upon  the  HCFA  Actuarys  estim:ltes,  we  converted  the  projected  savings 
eStimateS  froln  current  dollars  to  constant  do]lars  by backing  out  genera]  inikiliOII  as 
measured  by  the  Consumer  Price  Index.  This  rate  ~lverage~ 
3.92~ercent.  The 
resulting  constant  dollar  estimates  ~lre shown  in Chart  4. 
Chart  4 
Savings  in  Constant  Dollars 
g  ,8  +_-.  .. ..-...  -
. 
-- m,: 
,,,  ,,
03040506070809101112  13141516  171819202122  23242=282930 
3132 
Calendar  Years  2003  - 2032 
Source  The  Dcpartmcnl  OK I [callh and  I luman  Swviccs,  oflicc  of Inspwlor  General 
B-2
 We  also  converted  the  actuarial  estimate  to  todays  prices  by  subtracting  price

increases  specific  to  the  Medicare  Hospital  Insurance  program.  For  the  calculation,

we  used  a rate  of 5.09  percent,  the  average  annual  rate  of total  price  increases  used  in

the  actuarial  estimates.  The  results  are  shown  in Chart  5.

. 
__.Cha.rt  .5 
Savings  in  Todays  Prices 
__ 
~----  -- _.
E---
E-
rq 
W* 
q@ M-
%. 
*-* 
~o 
03040506070809 
Calendar  Years  2003  - 2032 
Source  The  Dcpartmcnl  of I Icallh and I Iuman SCMCCS, [)llkc  of Inspwlor  rkrrcrd! 
We  computed  the  present  value  of the  savings  estimates  using  6.32  percent,  the 
average  rate  of  interest  projected  to  be  earned  by the  Medicare  Trust  Funds.  The 
results  are  shown  in Chart  6. 
Chart  6 
Present  Value  of  Savings 
10 
-ZJ9  -.  ....  .- _ 
a
>8  ** 
~  _eL-eOQ,
7  WA  \ 
*4 
E 
.I=  -  ---:  ..  ..  .  --*-  ~ 
-4 
.E1 
_b 
!3
+.
,  H,, 
03040506070809101112  13141516171  S19202122232425: 
Calendar  Years  2003  - 2032 
Source  The  Dqrwlmcnl  of 1Icakh and 1Ium:m  Scrviws,  (Mlicc of Inspcclor  General 
B-3
 The  HCFA  Actualy  also  provided  us with  projections  of Medicare  Hospital  Insurance 
expenditures  that  would  occur  under  current  law,  i.e., without  raising  the  entitlement 
age.  These  used  the  same  underlying  assumptions  as the  projections  of savings.  Thus, 
we  were  able  to  compute  the  percentage  that  savings  are  of current  law  expenditures. 
The  results  are  shown  in Chart  7. 
Chart  7 
Savings  as  a  Percent  of  Current  Law  Expenditures 
5 
E  4.5 
a  * E-  -..::. --------
--- ---:--::.g
 -------~----~ 
q~H&e+ei
3.5  ~..-...  =-.-.~.
~  +------- W-- =~~  ---- ...____.
3 *--- *~~-- --?y--------+-------- -- 
? 
t%2. s  q%d2---_-.----
~----O-.-
2 
E.Illl.l-ll lll
1.5 
1

0.5 
0 
03040506070809101112131415  17181920  232425  272829303132
Calendar  ears  2003  - 32 
SOurctx  Thc  Dcparlmcnt  or f IcAIII  and  I Iuman  Swviccs,  1Icalth (Mc  llnancing  fkfministrdlinn,  ~11ke  Oflk Actualy 
Finally,  we  estimated  the  savings  that  would  have  been  achieved  in both  the  Hospital

Insurance  and  the  Supplemental  Medical  Insurance  programs  if the  Medicare

entitlement  age  had  been  increased  to  67  in  1991.  We  calculate  that  the  Hospital

Insurance  program  would  have  saved  $4.7  billion  and  the  Supplemental  Medical

Insurance  program  $2,4  billion  in  1991  if 65 and  66 year  old  beneficiaries  had  not

been  covered.  These  savings  incorporate  the  offset  of $(1.8 billion  in revenues,  which

is the  amount  of  premiums  that  would  not  be  collected  from  65 and  66 year  olds  if the

entitlement  age  is revised.  We  also  excluded  End  St:~ge Renal  disease  beneficiaries

from  this  calculation  but  were  unable  to  exclude  non-End  Stage  Renal  disease  disabled

65 and  66 year  olds  who  would  be  eligible  for  benefits  regardless  of  age.

B-4
 APPENDIX  C

Chart  8 
Projected  HI  Trust  Fund 
Expenditures  and  Income  Under  Current  Law 
28  29 30 31  32 
Calendar  Years  2028  - 2032  When  Proposal  is  in  Full  Effect 
!%urc%  The  Dcpmlmcnt  or 1Icalth und 1Iuman Scrviccs,  office  of Inspcclor  (kncrdl 
The  full  extent  of  the  progressive  Trust  Fund  deficit  for  years  2028-2032  is 
demonstrated  in Chat-t  X  For  the  sake  of colnparison,  we  also  show  the  net  deficit 
under  the  present  current  law and  the  age  67 proposals  in Chart  9.  Because  of 
rounding  there  may  be  discrepancies  in the  current  law  deficit  between  Charts  8 and  9. 
Chart  9 
Comparison  of  Projected  HI  Trust  Fund 
Annual  Deficit  - Proposal  versus  Current  Law 
~.,~~_____  _.._......... ... .--..-.  .  ~ 
1.7  +.- .-  
s 
i==------: ::-----
1.65   
2a ?1.15 .56   - T _~  *  =i  / Y  ~- c  Prouprroesnatl   Law 
~.  .-F 
=J 
B  12  F---------:- --:  -  - - -  -7  -
d  --q- .- ____ 
~  2  -t-%--F%i---   y   --::  --  
.=  1.1s ++  4//J&---
2 
::g~g:=[f-.  ~::  ~  5    : 
  .  ,. /,/i-.  I  lFlf  .,   
28  29 30 31  32 
Calendar  Years  2028  - 2032  When  Proposal  is  in  Full  Effect 
Source  Thc  Dcparlmcnl  of I lcalth  and [ Ium:m Scrvic~,  (Mlicc or Inspwtnr  (kncral 
c-1
 APPENDIX  D

BIBLIOGRAPHY

Achenbaum,  W.  Andrew.  Social  Security  Visions  and  Revisions.  A Twentieth  Century 
Fund  Study,  New  York:  Cambridge  University  Press,  1986. 
Bowen,  William,  et.  al. The  American  System  of Social  Insurance:  Its  Philosophy, 
Impact,  and  Future  Development.  The  Princeton  Symposium,  New  York:  McGraw-
Hill,  1968. 
Davis,  Kenneth  S. The  Birth  of Social  Security.  American  Heritage, (April/May 
1979),  pp.  38-51. 
Derthich,  Martha.  PolicVmakinU  for  Social  Security,  Washington,  D. C.:  The  Brookings 
Institution,  1979. 
Douglas,  Paul  H.  Social  Security  in the  United  States.  New  York:  McGraw-Hill  Book 
Company,  1936. 
Public  Law  98-21,  Title  11- Additional  Provisions  Relating  to  Long-Term  Financing 
of  the  Social  Security  System.  Social  Sewi[y  Amendments  of 1983, (April  20,  1983). 
Stein,  Bruno.  Social  Security  and  Pensions  in Transition:  Understanding  the  American 
Retirement  Svstelm.  New  York:  The  Free  Press,  1980. 
U.S.  Congress,  House,  Committee  on  Ways  and  Means,  Medical  Care  for  the  Aged. 
H.R.  3920,  88th  Congress,  1st and  2nd  Sessions,  Part  1 (November  18,  19, and  20, 
1963). 
U.S.  Congress,  House,  Committee  on  Ways  and  Means,  Medical  Care  for  the  Aged. 
89th  Congress,  1st Session,  Part  1 (January  27, 28, February  1, 2, 3, 4, 5, 8, 9,  10, and 
16,  1965). 
U.S.  Congress,  House  Conference  Report,  Additional  Provisions  Relating  to  Long-
Term  Financing  of  the  %cial  Security  System.  Socio[  Security Amendments  of 1983, 
(March  24,  1983). 
U.S.  Congress,  House,  Committee  on  Ways  and  Means,  Communication  from  the 
Board  of Trustees  of  the  Federal  Olci-Age  and  Survivors  Insurance  and  Disability 
Insurance  Trust  Fund.  102nd  Congress,  2nd  Session,  House  Document  102-279,  U.S. 
Government  Printing  Office,  Washington:  1992, 
D-1
 U.S.  Congress,  House,  Colmrnittee  on  Ways  and  Means,  Communication  from  the 
Board  of Trustees  of the  Federal  Hospital  Insurance  Trust  Fund.  102nd  Congress, 
2nd  Session,  House  Document  102-280,  U.S.  Government  Printing  Office,  Washington: 
1992, 
U.S.  Congress,  House,  Colmmittee  onWays  and  Means,  Communication  from  the 
Board  of Trustees  of the  Federal  Supplementary  Medical  Insurance  Trust  Fund! 
102nd  Congress,  2nd  Session,  House  Document  102-281,U.S.GovernmentP  rinting 
Office,  Washington:  1992. 
U.S.  Congress,  Senate,  Committee  on  Finance,  Social  Security.  H.R.  6675,  89th 
Congress,  lst  Session,  Part  1 (Apri129,  30, and  May  3,4,5,6,7,1965). 
U. S. Congress,  Senate,  Committeeon  Finance,  National  Commission  on  Social 
Security  Reform  Recommendations,  98thCongress,  lst  Session,  Part20f  3, (February 
22 and  23,  1983). 
U.S.  Congress,  Senate,  Committee  on  Finance,  National  Commission  on  Social 
Security  Reform  Recommendations.  98thCongress,  1st Session,  Part  30f3,  (February 
24,  1983). 
U.S.  Department  of  Health  anti  Human  Services,  Health  Care  Financing 
Administration,  Office  of the  Actuary,  Office  of Medicare  and  Medicaid  Cost 
Estimates,  Division  of  Hospital  Insurance. 
U.S.  Department  of Health  and  Human  Services,  Office  of Inspector  General,  Office 
of Audit  Services,  OIG  Recommendations  Impacting  on  the  Solvency  of the  Medicare 
Trust  Funds,  (June  1991). 
U.S.  Department  of  Health  and  Human  Services,  Social  Security  Administration, 
Social  Security  Amendments  ot 19S3: Amendment  Summary.  SSA  Publication 
Number  67-006,  (JLIly 1983). 
U.S.  Department  of  Health  and  Human  Services,  Social  Security  Administration, 
Social  Security Courier, (June  1992). 
U.S.  Department  of  Health  and  Hulman  Services,  Social  Security  Administration, 
Pro~ram  Operations  Manual.  RS  ()()615.()()1 - ()()615,()05, Basic  (TN  8)  12-89. 
U.S.  Department  of  Health  and  Human  Services  and  Metropolitan  Life  Insurance 
Company,  National  Center  for  Health  Statistics,  Life  Insurance  Fact  Book  Update. 
1991. 
D-2