Objectives. This article used a new data source to examine the issue of dis
ability trends among elderly persons and examined the potential implication
s of these trends on future health and long-term care needs.
Methods. We used the 1992-1996 Medicare Current Beneficiary Survey to exami
ne time trends in rates of activities of daily living and instrumental acti
vities of daily living disability and physical limitation among Medicare be
neficiaries aged 65 and over. We used multinomial logit and least squares r
egression techniques to produce trend estimates that held the age, sex, rac
e, and educational distributions constant and projected these trends into t
he future. Finally, we estimated the potential impact of disability decline
on per capita Medicare spending on elderly persons.
Results. We found that disability among elderly persons is declining and th
at the trend toward a more educated elderly cohort explains some, but not a
ll, of this decline. In the absence of downward disability trends, per capi
ta Medicare expenditures would have grown even faster than they have.
Discussion. Although the decline in disability prevalence in recent years a
ppears real, whether it continues has enormous implications for the size of
the disabled population in the future and for the ability of the society t
o care for its disabled elderly members.