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Over the next fifty years, the size and age structure of Europe’s population will experience major changes due to low fertility rates, continuous increases in life expectancy due to medical advances and the retirement of the baby boom generation. The main output of this work package is a model which allows the construction of scenarios for health and long-term care expenditure based on the premise that health spending is driven by a number of demographic, economic, social and institutional variables. The projections computed in this study are not forecasts but are instead intended to provide an indication on the potential timing and scale of budgetary challenges that could result from Europe’s ageing population.