Age wave's silver lining

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John O'Connor
John O'Connor

It's hardly breaking news that we live in an aging nation. But the latest numbers may give providers even more reason to feel optimistic about remaining solvent once the age wave hits.

As many operators are well aware, the number of people aged 65 or older is expected to grow to 84 million in the upcoming decades, according to a new report from the U.S. Census Bureau. 

But the real wheelhouse for most long-term care communities is the 85-plus cohort. That's because — surprise! — this group accounts for the overwhelming majority of people requiring skilled care and other senior living-related services.

The projections — at least from a market growth perspective — are quite encouraging. As the report noted, the total will nearly double by 2036 (to 8.9 million) and double again by 2049 (to 18 million). By 2050, those 85 and older are projected to account for 4.5% of the nation's population, up from 2.5% in 2030.

But not everyone is thrilled to see this shift. A growing army of economists is fretting about the age wave's impact. Chief among their concerns is that this redistribution will result in less spending, savings, output and growth.

Some of these headcounters also worry that without a jump in fertility rates, fewer working age Americans will be around to finance social programs. By 2030, there will be 35 people 65 years old and up for every 100 working-age Americans. That's quite an increase from the 21 in 2010, not to mention the 17 in 1970.

But what tends to be overlooked in these discussions is a growing chasm between workers who are highly skilled and others who are not. It's entirely reasonable to expect that in the future we'll see more highly-educated older people continuing to work and pay taxes long after they turn 65.

This is likely to give operators two benefits. The first: These still-active seniors will be paying into the programs that help providers stay in business, such as Medicare, Medicaid and Social Security.

The second: They may be in a better position to defray or even cover their own care costs. 

So maybe the future won't be so terrible after all.