Population ageing has become a critical issue in Australia as Baby Boomers move into old age. The dynamic microsimulation models has been used for policy analysis and to help inform policy makers the impact of social changes. However, there is a significant lack of longitudinal studies in Australia that document changes in people's health and disability statuses over their life course. This research identified who the Baby Boomers are, projected their demographic and disability profiles over the next 40 years, and examined the likely future demand for aged care by the Baby Boomer generation. In particular, this research developed a Multi-State Disability Model (MSDM) to add a dynamic element and longitudinal continuity to the disability state assigned to individuals over the 40 year simulation run of the aged care module in the large dynamic microsimulation model APPSIM (Australian Population and Policy Simulator). The traditional Sullivan method was also employed so that the outcomes from the microsimulation modelling could be compared with more traditional methods for estimating the years of life that the Baby Boomer population are expected to live with or without disability.