The ageing of the population and increasing longevity result in predictions of sizeable increases in long-term care expenditures. Other analyses have shown significant decreases in disability prevalence among older people in the US. This study provides an empirical quantification of the net result of these two forces (increased expenditures due to ageing versus potential expenditure reductions due to reduced disability) using the Medicare Current Beneficiary Survey. The analyses show that the implications of ageing and increasing longevity for long-term care expenditures are modest relative to the effects of future increases or decreases in functional abilities of older people.