This paper aims at understanding the elderly-non-elderly difference in morbidity and utilization of outpatient care and how such differences vary across economic classes by using a population based self reported health survey in the context of Kerala—an Indian state which is in the advanced stage of demographic transition and has the highest share of elderly population in comparison to other Indian states. It is found that for the elderly chronic non-communicable diseases account for four out of five of the most frequently reported illnesses. An elderly belonging to rich or middle classes is more likely to utilize outpatient care in comparison to a rich non-elderly, however such a pattern is not observed for the poor elderly. Experience of Kerala suggests that ageing of the population is going to impose severe challenge to the public health sector in other Indian states which will be entering into the advanced stage of demographic transition shortly and there is a need to examine in greater details the willingness and capacity of the private sector to share this increased burden for health care need.