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Rising medical costs due to aging population have been a growing concern to both elderly households and the National Health Insurance (NHI). While previous research is preoccupied with forecasting medical costs under the assumption of constant or constantly rising age-medical cost profile, this paper analyzes the medical cost of the elderly taking account of "end-of-life" medical cost, the more important factor affecting their medical costs. Among the results, the medical cost for the elderly has increased significantly since 1999 to represent 31.58% of the total NHI cost in 2009. Simultaneously, the medical cost for the poor elderly under the Medical Aid Program increased to 41.4% of its total cost in 2009. Increased use of medical care, especially inpatient care, is shown to have contributed significantly to these results. Furthermore, the distribution of medical cost is skewed to the right for the elderly and spreads out as their age increases. In addition, the medical cost during the last year of life is significantly high but declines with age at death. These results mean that for the sake of better health policy on rising medical costs with aging population, both distribution of medical cost and "end-of-life" medical cost should be taken into consideration together with such factors as income, health status, and health insurance coverage.
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