Baby Boomers Creating the Next Financial Crises

The news during the past decade has illustrated challenges not experienced in years:  unemployment, the loss of health care benefits, bank failures, the mortgage crises resulting in and families losing their homes and companies going out of business.  Whether or not you agree with the political side of these events, the projections regarding the need for long term care are real and will support the next financial crises.

According to research performed by the Urban Institute (, the number of older adults accessing paid home care will more than double between 2000 and 2040 increasing from 2.2 million to 5.3 million while the number of older nursing home residents will also more than double over the period, increasing from 1.2 million to 2.7 million.1  Medicare, Past Present and Future indicates that heath care spending is growing at 2-3 times the national debt.  Medicare spends more money than it receives in dedicated taxes and premium payments allocated each year. By 2020 Medicare will claim 1 in every 5 tax dollars and by 2050 Medicare will claim 1 of every 2 tax dollars.2  It doesn’t take a scholar to see that sustaining Medicare in its current form will be near impossible.

The literature mentions that eventually choices will have to be made between spending funds on health care or other government programs. It will be the choice being a good candidate for knee replacement surgery versus a candidate who could have the surgery but will not recover well because of past lifestyle choices. The health care system will have to ask, “Why waste health care dollars on a poor surgery candidate?”

Here are a few ideas about ways to help yourself:

  • Become educated about maintaining your own health to reduce unnecessary health care expenditures.  Take actions to improve your overall health.
  • Translate what you know into action:  stop smoking, exercise, eat healthy and maintain a recommended weight.
  • Write to your legislators about realistic solutions for healthcare and entitlement programs
  • Become an active participant in organizations educating and supporting health care to raise overall awareness of the issues
  • Purchase long term care insurance today while healthy.  Premiums increase substantially after the diagnosis of disease.  Some diagnoses, like the diagnosis of Alzheimer’s disease, eliminate the opportunity to purchase long term care insurance.
  • Plan for long term care needs to avoid becoming reliant on the government plan of Medicaid
  • Talk to your parents about planning for long term care today so they won’t end up impoverished or need your retirement savings to pay for their care

Unless action is taken today through planning, education and advocacy, the aging of the Baby Boomer Generation will result in the next financial crises for the United States related to the entitlement programs of social security, Medicare and Medicaid.


(1) Johnson, Richard et al., Meeting the Long Term Care Needs of Baby Boomers.  Discussion paper 07-04 in The Retirement Project series.

(2) Livingston, Kari. Study Claims Medicare Debt Will Rise $32.4 Trillion. National Center for Policy Analysis.

© 2012, 2013 Pamela D. Wilson.  All Rights Reserved.

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