This human instinct for authority over our own lives will soon be tested by more Americans than ever. Have we taken the necessary steps to prepare for this graying of the nation? Not only do we have an unprecedented cohort of Americans entering their golden years with associated medical needs; we also have increasing life expectancy. Is Philadelphia, one of the poorest cities in America, ready to take care of its growing numbers of aging adults?
It’s been referred to as the “2030 Problem.” That’s the year, only seven from now, when all baby boomers (76 million Americans born between 1946 and 1964) will be over 65 and account for about 20 percent of the population. (As a point of comparison, in 2000, there were only 35 million people 65 and over, constituting 12.4 percent of the population.) By 2060, 95 million Americans will be 65 and up, representing 23 percent of the population. And people don’t need less care as they age, so this demographic shift presents some troubling realities about a massive impending need that will require equally massive resources. Unprecedented funding will have to be directed toward health care. Along with increasing longevity will come a sharp rise in the number of Americans living with Alzheimer’s disease. The Alzheimer’s Association estimates that those afflicted will increase from seven million now to almost 13 million by 2050. So how do we provide necessary care and ensure appropriate funding for the long-term health services of this age group? The burden of care against the backdrop of skyrocketing medical costs, inflation, ever-increasing health-care workforce shortages, and political skirmishes over “sunsetting” entitlement programs such as Social Security (which in 2020 began paying out more than it was taking in and could be depleted by 2035 without Congressional action) and Medicare (which also faces long-term financing shortfalls), should leave all of us worrying.
“The 30,000-foot view is that we have three fundamental issues in our system that are the genesis of our problems,” says Amol Navathe, a health policy professor and internist at the University of Pennsylvania, where he is co-director of the Perelman School of Medicine’s Healthcare Transformation Institute. Navathe identifies the first problem as the smaller share of Americans footing the bill for Medicare than when it was conceived in 1965, when senior citizens were only nine percent of our total population. Financing for the entitlement comes primarily from payroll taxes — about 90 percent, in fact. So there is vastly more need on the immediate horizon, along with a sharply diminishing number of working Americans paying into the pot. Don’t forget to factor in the long-term implications of our country’s declining birth rate. “Financing-wise, we can see that’s a problem, along with care getting more expensive,” says Navathe.
Problem number two, says Navathe, is thinking of Medicare insurance in the same way we think of private health insurance. The issue is that typically, insurance is taken out by the policyholder as a protection against unexpected incidents (and their costs) in the future. So you pay a small premium now to protect yourself from having to foot the entire bill later if your luck changes and you get sick or have an accident. This construct works for health insurance companies because with a relatively healthy group of policyholders, they take in more than they pay out. The problem with Medicare insurance and an aging population is that the majority do need care — a lot of it, and only more as time goes by. “With chronic long-term or degenerative conditions, the typical diseases of the elderly,” Navathe explains, “insurance doesn’t work the way it’s designed. If I diagnose a patient with dementia, they will require more and more resources and care. The whole construct of insurance as a hedge evaporates.” For example, according to the Center on Budget and Policy Priorities, Medicare’s Hospital Insurance Trust Fund, which pays for hospital and post-acute care in rehab facilities, is predicted to be unable to provide 100 percent coverage as soon as 2028, dropping down to paying only 90 percent of benefits.Read more at Philadelphia Magazine.