The debate about whether health expenditures will increase more or less for the old is conceptually confused because the participants focus on different factors, use different assumptions and, finally, do not connect the predictions to more general theories of demand for health services. Some focus on increases in life expectancy and how this will change the distribution of end-of-life costs. Others focus on how changes in income and technology will affect the relationship between age and health spending. Higher income, and a larger share of the population, will make it more profitable to invest in treatments aimed at old people, which will lead to steepening in some age groups, but a flattening in other age groups.
Keywords: elderly; expenditure profile; health expenditure; red herring; steepening.