The Boomer Impact on the U.S. Bottom Line

Examining the rising costs of an aging American population

For years, many have been predicting the federal budget would collapse under the aging boomers and we are here. The U.S. national debt is currently at $19,941,672 trillion, and President Trump is beginning where Obama left off, doubling from the Bush era that ended in just under $10 Trillion in debt in March 2008. The US Federal Budget deficit was just under $300 billion in 2008, it has almost doubled to just under $600 billion today.

While U.S. Revenue has increased through taxes, Federal spending has outpaced its growth. Debt to foreign nations has increased by $2.386 trillion. It is time for U.S. citizens to understand our country has serious concerns and managing our future is extremely important, so it’s necessary to see the truth. U.S. culture finds more young people in the Midwest moving away from their home areas, leaving parent’s care to others, such as nursing home care (expected to double in 2030 since 2013).  Other countries, such as China, for the first time in their history find themselves struggling with the same shifts in culture as their youth leaves home; and the care of their parents would go to others, thus causing them to begin to build nursing care facilities, as never needed before. The Boomers impact the world.

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Our reality of Baby Boomers, who in 2016 were between the ages 52 to 70, account for 46 million in 2016. The Boomers’ children are expected to be 98 million by 2060.  Many studies have shown, boomers are working longer than previous generations, projected in 2022 to be 27% for men and 20% for women working past 65, impacting employer’s healthcare costs.

The average U.S. life expectancy increased from 68 years in 1950 to 76.3 for men and 81.2 for women, in 2017. Obesity rates increased 40% among those 65-74 years of age from 2009-2012, causing Medicare/Medicaid spending to increase, a trend experts expect to continue. In 2014, this aging population of women (27 percent) lived alone, increasing to 42% as women age to years 75-84, (56%-85% of women 85 plus). Alzheimer’s disease is expected to increase, possibly tripling by 2050 to 14 million from 5 million in 2013. Social Security has increased since 2008 by $329 billion, along with Medicare/Medicaid increasing by $560 billion. These demographics of the aging population and rising healthcare costs are not sustainable per the federal government’s fiscal policies.

Medicaid provides payments to managed care organizations (MCOs) and account for 43% of Medicaid spending. Kaiser Foundation tells us that elderly persons with disabilities make up one-quarter of all Medicaid enrollees and accounts for almost two thirds of Medicaid spending.  The GOP proposed legislation to grandfather in all with Medicaid today, until 2020 and then reduce the federal funding for the expanded pool to 90% in the states that chose to continue with the ACA Medicaid expansion. This percentage would stay in place with the state paying the remaining 10%.  Then, anyone new to the expansion of Medicaid assistance after 2020, would fall 100% to the state. For the 19 states that did not chose the Medicaid expansion, the Federal Government would give $10 billion over a five-year period. The entitlement would go away and it would cap at a pro-capita amount, depending on enrollment.

“Our reality of Baby Boomers, who in 2016 were between the ages 52 to 70, account for 46 million in 2016. The Boomers’ children are expected to be 98 million by 2060.”

Medicaid is the third largest domestic program in the federal budget following Medicare and Social Security, and the largest source of federal revenues for state budgets, creating positive effects for state economies. States have adopted an array of policies to control Medicaid spending growth and are concerned with the GOP pushing more spending on them, while the expectations of the US citizens are looking to our government to continue the promises made by the Affordable Care Act. The American Health Care Act, was proposed and presented by the GOP, included banishing the individual mandate-lessening tax burdens, continue with subsides in the free market- allocated differently with age and phasing out those with incomes over $75,000, rid of cumbersome IRS tax penalties, while keeping the employer and carrier reporting in place. The earlier Republican proposal to tax employer-provided health insurance over the 90th percentile of premiums was no longer a feature of the bill, a victory for employers. Recently, Anthem CEO Joseph Swedish told top House Republicans in a letter obtained by Morning Consult, that “Anthem supports the Obamacare repeal bill, and urged lawmakers to move the process forward, as quickly as possible.” The GOP has pulled the legislation for now. 

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Healthcare costs are rising for the US Federal government and states.  The cost of living has increased personal debt, by astoundingly $2.386 trillion dollars in the past nine years.  State revenue has increased in the past nine years; however, so has the debt grown.  This is why the state officials are arguing they cannot afford even a portion of the Medicaid expansion. It is a lose-lose situation, with nowhere to go, but to increase jobs to increase the US Federal and State Revenue. With the personal debt increasing so rapidly and the student loans increasing, now at $1.423 trillion, young people are unable to afford mortgages. The mortgage debt has decreased from 2008 by $84 billion, as the younger populations are strapped with student loans and increased expectations from employers requiring college degrees and MBAs in our technology/service age.  Credit card debt has increased by $57 billion since 2008. The total personal debt today is $56,216 per US citizen.  There is no room in the individual or family budget for increased healthcare costs, nor in the state or federal budgets, as our future spending emerges ahead of us. Understanding these factors should cause everyone to plan to decrease their personal debt, and the federal and state government to balance their deficits; however, the numbers show this is not the case, and is easier said than done. The tough, hard line- old school approach is not popular today. The Silent Generation born in (1925-1945) during the great depression (1929-39), and their parents who dealt with it- the Greatest Generation (1910-1924) knows what is looming ahead of the United States.  Therefore, the conservatives are pushing their agenda in a very expectant generation, and it’s not going over well. While impossible to satisfy everyone, the ACA is unsustainable, as the numbers dictate; therefore, the GOP pressed too hard on the states to care for their own in future generations, and hard lined conservatives, needed for the vote, wanted more, so it was not put to the final vote. This president struggles with inspiring the congress towards change so soon in his political career. Only time will tell the future of our healthcare, yet today, ACA it is.