Blog Post

7 things to know about the aging U.S. population

By Elysia Culver

April 5, 2022

    The aging of the Baby Boomer population—or those born between 1946 and 1964—is one of the most significant demographic trends currently facing the health care industry. Currently, we are a little more than halfway through this generation aging into Medicare—the last Baby Boomers will turn 65 in 2030.

    To create a sustainable model that meets the needs of our aging nation, it's important to understand how the senior population has changed over the past decade and what to look to in the future. Here are the most important things to know.

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    1. The overall adult population is becoming increasingly older, predominantly female, and less white.

    A combination of low fertility, increased longevity, and the size of the Baby Boomer Generation have led to the rapid growth of the older population across the world and in the United States. In the 2010 census, the oldest Baby Boomer had not even turned 65. Since then, about 10,000 Boomers have turned 65 each day, and by 2030, all of them will be at least 65.

    The sex ratio (a measure of sex composition) declines with age since females have a higher life expectancy. As a result, the oldest segment of the population is predominantly female. It's projected that the non-Hispanic White-alone population will shrink over the coming decades, driven by their falling birth rates and rising death rates.

    These changes to the older population will have implications on more than just the demand for health care services. Society will have to reckon with the increased housing, caregiving, transportation, and social needs of this demographic group.

    2. Life expectancy is on the rise, impacting the prevalence of chronic disease and disability.

    Life expectancy will continue to rise but the growth will be smaller than in the past due to stalled progress in treating the leading causes of death and degenerative diseases, and the continued prevalence of smoking and obesity. Life expectance also dipped for the first time since World War II during the Covid-19 pandemic.

    With an increase in life expectancy comes an increase in disease prevalence. The majority of adults aged 65+ have at least one chronic condition and many have multiple conditions which require several medications. Prescription medication use increased dramatically among older adults between 1988 and 2010, and today, about 89% of adults are currently taking at least one prescription medication. Also, the longer we live, the more time there is for errors to build up in genetic codes. This means deaths from degenerative diseases like Alzheimer's and certain cancers are rising. By 2030, cancer may overtake heart disease as the leading cause of death.

    To mitigate the implications of chronic and degenerative diseases, we will need to reduce the leading risk factors, and continue investing in disease research. This translates into supporting healthier diets, more exercise, less smoking, better access to health education, and funding toward research projects.

    3. Older adults are in a precarious financial situation given increased costs of care with fewer dollars saved.

    Compared to previous generations, older adults carry more debt into retirement and have fewer overall savings and pension income. Also, today's pre-retirees may face heightened financial challenges due to the Great Recession, including unemployment, early retirement, loss of savings, and declines in home equity.

    Therefore, as they move into retirement and on to a fixed income, they will likely face challenges with rising medical costs—a figure that has risen about a trillion dollars from 2009 to 2019, when adjusted for inflation. Almost 94% of non-institutionalized adults aged 65+ are covered by Medicare, but the program still leaves older adults exposed to high out-of-pocket costs associated with premiums, deductibles, and co-insurance.

    Also, there is no current Medicare out of pocket maximum, which means that older adults with chronic health conditions or unexpected health crises can face thousands of dollars in medical costs if they don't have subsidized supplemental coverage or Medicaid. When older adults need long-term care, they must either spend down assets to qualify for Medicaid or self-pay, since Medicare doesn't typically cover these services.

    4. The future demand for paid and unpaid caregivers will outpace current supply expectations.

    The direct care workforce—which includes home care workers, residential care aids, and nursing assistants in nursing homes—expanded rapidly over the last decade, growing from 3.1 million workers in 2010 to 4.6 million in 2020. It's expected the growth will continue, driven primarily from the rise in demand for these services.

    However, low wages and poor working conditions have discouraged workers from applying or staying in these jobs. Also, the Covid-19 pandemic has magnified existing burnout issues. With a lack of paid caregivers and an expanding older adult population, there's been a simultaneous increase in the demand for unpaid caregivers.

    In 2020, about 42 million Americans, predominately women, provided unpaid care to someone 50+ years. Often, these middle-aged adults are also responsible for supporting children, intensifying their stress and financial responsibility.

    Lastly, experts are suggesting that the limited number of geriatricians is going to become a public health concern over the next 50 years. There are roughly 7,300 certified geriatricians currently practicing in the U.S. and the American Geriatrics Society expects we will need 30,000 geriatricians by 2030. Lack in compensation and educational requirements in U.S. medical schools are the main factors explaining the lack of geriatricians.

    5. Older adults have made it clear that they prefer to age in place—however, this isn't feasible for many.

    Most older adults want to age in place—or stay in their own homes as they grow older— because it allows them to remain independent and in a familiar environment. The Covid-19 pandemic only strengthened that position, since many were fearful of living in long-term residential facilities, particularly nursing homes, where they could contract Covid-19.

    Despite the desire to age in place, there are several factors that contribute to whether an older adult can successfully do so. The largest limiting factor is the inability to safety perform activities daily living (ADLs), which include but are not limited to bathing, getting dressed, eating, and climbing stairs.

    The physical environment of the home can also present both health and safety risks, especially without caregivers to support. There are also geographic barriers to aging in place. Rural communities provide fewer transportation, meal, and social services in comparison to larger metro communities.

    6. Medicare Advantage continues to grow nationally and will likely outpace traditional Medicare by 2030.

    One of the biggest changes over the past 10 years—and a change that will continue—is the growth of Medicare Advantage (MA). By 2030, it's expected that more people will be enrolled in MA than in traditional Medicare—or 51% of all Medicare beneficiaries. There are several factors driving the rapid growth in MA.

    Many payers have entered the market as they see MA as an opportunity for growth. There are double the number of plans that consumers can access now compared to 2017, including many zero premium plans, which gives greater access to MA.

    Also, consumers are reporting satisfaction with their benefits covered by MA plans and may be less likely to switch to traditional Medicare benefits. As we see an increase in popularity in MA, there will likely be increased competition and consolidation among plans—along with increased scrutiny on how plans are marketing to consumers.

    7. Covid-19 disproportionately impacted older adults and worsened existing problems around caring for them.

    We would be remiss if we didn't acknowledge the devastating impact of the Covid-19 pandemic on older adults. One in 100 older Americans has died from the virus. For people younger than 65, that ratio is closer to 1 in 1,400.

    On top of this, the pandemic has exacerbated levels of social isolation and loneliness. Loneliness is as much of a risk factor for one's physical well-being as chronic conditions like heart disease, or diabetes. Despite the heightened vulnerability and poor outcomes for this age group, the pandemic has created an inflection point in deciding how we care for older adults.

    Government and health care leaders must come together to address a myriad of issues, especially related to workforce demands, regulatory burdens, and how we allocate resources and money to improve palliative, end-of-life care, and long-term services and supports.

    Caring for America’s seniors

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    Our team is working hard to understand how the industry can better care for older adults. Explore this work at advisory.com/seniors.

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