Significant conversation surrounds the coming of (retirement) age of the Baby Boomer generation and the resulting implications for the health care system. A recent report from the Congressional Budget Office (CBO) further underscores the magnitude of this issue. Just what can we expect in the decade ahead and what does it mean for the future of assisted living? Let's take a closer look.
Dramatic Increase in Medicare Enrollment: A Revealing Report
According to the CBO's “Budget and Economic Outlook: 2016 to 2026,” the number of Americans over the age of 65 will skyrocket by approximately 37 percent over the next decade. Not surprisingly, this is anticipated to have a dramatic impact on total federal outlays — particularly in the healthcare sphere.
How much so? According to the CBO's findings, of the projected $2.5 trillion increase in spending, Social Security and Medicare will account for a full half of this figure.
In 2015 alone, meanwhile, Medicare spending rose by seven percent — or $34 billion — outpacing the program's rate of growth for every year since 2009. A contributing factor in this increase, according to the CBO? Medicare beneficiaries increased by three percent along with the cost of services provided to these beneficiaries.
All in all, Medicare enrollment is anticipated to experience growth of more than 30 percent by 2026.
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The Changing Picture
It's not all gloom and doom, however. To begin with, the overall good health of Baby Boomers has actually resulted in less Medicare spending than initially projected thanks to a combination of shorter hospital stays and Affordable Care Act incentives aimed at containing readmissions. Additionally, reduced Medicare fraud is also helping to contain costs.
Still, in an effort to keep Medicare solvent, increased enrollments have been accompanied by increases in premiums. In fact, one out of every seven Medicare beneficiaries experienced a monthly increase from $105 to $123 in 2016, according to the AARP. Others can expect to see their premiums go up in the near future, as well.
Ongoing fears about looming insolvency are also likely to lead to increases in, out-of-pocket costs as well as possible changes to the age of eligibility.
Implications for Assisted Living
While the broad takeaways are clear when it comes to the future of assisted living and the growing demand for services and skilled labor for senior care, the issue may not be as clear-cut as it first appears.
One thing most experts agree upon despite the financial uncertainty? That the future will continue to see a movement away from conventional nursing homes and toward a number of other different options — from home care to independent living. Factor in the rising cost of skilled nursing and the nursing shortage, and the need for creative solutions grows clearer.
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Other alternatives on the horizon? Multigenerational housing options, senior-co-housing, senior-friendly community planning, and, of course, the need to facilitate aging in place in response to the increased demand.
Ultimately, while economic concerns are certainly deeply pertinent, a number of other issues also come into play when it comes to forecasting what's ahead for the industry. One commonality shared by all? The need for better legal and financial help for seniors in order to facilitate their ability to take on proactive roles in choosing their living arrangements in their golden years.