Elder Law FAX The February 26 2007, issue of Elder Law FAX, a free newsletter published every other Monday by the Elder Law Practice of Timothy L. Takacs.   Disability Among Older Americans Continues Significant Decline The latest issue of Elder Law FAX (February 12, 2007) introduced the "compression of morbidity" hypothesis." First formulated in 1980, this hypothesis asserts that the onset of chronic, irreversible illness will be delayed so that the period of infirmity will be compressed into a shorter period of time before death.   By contrast, the expansion of morbidity hypothesis, which was put forth in the mid-1970s, asserts that longer life will be associated with a prolonged period of morbidity and disability--in short, we are destined merely to get older and sicker longer.   After 25 years of gathering and analyzing data, researchers now believe that the compression of morbidity hypothesis is correct. Human beings, particularly those in the developed world, are not getting older and sicker. We can expect to live longer lives, with less disability and incapacity.   Our February 12 issue suggested that one of the ramifications of a healthier older America is that spending on health care as a percentage of the nation's Gross Domestic Product (GDP) is likely to level off, rather than to continue its climb into the stratosphere.   Interestingly, last week the policy journal Health Affairs released on its Web site (www.healthaffairs.org) two studies on health spending.   The first study, written by analysts at the U. S. Centers for Medicare & Medicaid Services, projected growth in national health spending is projected to slow slightly from 6.9 percent in 2005 to 6.8 percent in 2006, marking the fourth consecutive year of a slowing trend. The health share of GDP is expected to hold steady in 2006 before resuming its historical upward trend, reaching 19.6 percent of GDP by 2016.   The second study projected that notwithstanding the anticipated decline in employer-sponsored insurance and the long-term care needs of the baby boomers, Medicaid spending as a share of national health spending will average 16.6 percent from 2006 to 2025--roughly unchanged from 16.5 percent in 2005--and then increase slowly to 19.0 percent by 2045. Growth in government revenues is projected to be large enough to sustain both Medicaid spending increases and substantial real growth in spending for other services.   What is the evidence for this not-so-bad news?   Chronic disability among older Americans has dropped dramatically, and the rate of decline has accelerated during the past two decades, according to an analysis of data from the National Long-Term Care Survey (NLTCS). The study, published last December in the  Proceedings of the National Academy of Sciences, found that the prevalence of chronic disability among people 65 and older fell from 26.5 percent in 1982 to 19 percent in 2004/2005.   An Acceleration in the Rate of Decline in Disability In addition to a drop in the percentage of older Americans reporting disability, the analysis found that the average annual rate of the decline has accelerated. The decline in disability averaged 1.52 percent annually over the 22-year time span, but the rate of change shifted gradually from 0.6 percent in 1984 to 2.2 percent in 2004/2005.   "This continuing decline in disability among older people is one of the most encouraging and important trends in the aging of the American population," NIA Director Richard J. Hodes, M.D., is quoted in a press release from the National Institute on Aging, which funded the study.   The NIA release also stated that from 1982 to 2004/2005:   Chronic disability rates decreased among those over 65 with both severe and less severe impairments, with the greatest improvements seen among the most severely impaired. The researchers note that environmental modifications, assistive technologies and biomedical advances may be factors in these declines.   The proportion of people without disabilities increased the most in the oldest age group, rising by 32.6 percent among those 85 years and older.   The percentage of Medicare enrollees age 65 and older who lived in long-term care institutions such as nursing homes dropped dramatically from 7.5 percent to 4.0 percent. The emergence of assisted-living options, changes in Medicare reimbursement policies and improved rehabilitation services may have fueled this decrease in institutionalization.   If they continue as anticipated, the downward trends in chronic disability rates among older adults could help bolster the Medicare program's fiscal health, the researchers suggest.