by Kenneth A. David, Esq.

CMS has announced that as of March 31, 2014, they will now be using the 2009 CDC Life Table, replacing the 2007 CDC Life Table.

The good news is that overall we are living longer. However, it does mean increasing costs to MSAs where medical costs are projected out for life.

Generally, the use of a table which is two years “newer” will mean a life expectancy increase of 0.4-0.5 more years. For instance, in 2007, a 40 year old was expected to live 39.9 years; in 2009, that same person is expected to live 40.4 years. For a 55 year old, the numbers are 26.7 and 27.1 respectively.

For a claim where there are annual medical expenses of $4,000, the increase could add another $2,000 to the claim.

Rated ages (taking into account factors that could reduce the life expectancy of a particular claimant) can still be used. Also, continuing to use an annuity to fund an MSA will lessen the increased costs.

The identified reason for the increase in life expectancy is a decrease in deaths from heart disease, cancer, unintentional injuries, strokes and chronic lower respiratory diseases. Unfortunately, these increases in life expectancy were slightly offset by increases in deaths due to chronic liver disease and suicide.