Colorado Medicare Classroom

Over 65

It began in 1946, and while there is much debate as to when it actually ended, it is generally agreed that the 76 million American children born between 1946 and 1964 represent a cohort that is significant on account of its size. This group of people is widely known as the baby boomer generation. I am one of them.

A large part of the Baby Boom was an after-effect of World War II. The United States, like many other free world countries, experienced an unprecedented bubble of vigorous economic growth that did not diminish until 1968. Furthermore, in the U.S. the G.I. Bill enabled a record number of people to attend college and obtain, perhaps in many cases, the first college degree in their extended families.

Born in 1953, I was not only the first of my family to graduate high school (1971), I was also the first to attempt any higher education, earning my Bachelor of Arts Degree in 1980. Coincidently, I was a recipient of the GI Bill college benefits.

My interest in composing this article is partially because I have lived through the world that my fellow boomers have experienced, but a more important reason is to hopefully open some eyes as to what might lay ahead for my generation.

Some historians break down the Baby Boomers into two cohorts:
Baby Boomer cohort #1 (born from 1946 to 1954)
§ Memorable events: assassinations of JFK, Robert Kennedy, and Martin Luther King, political unrest, walk on the moon, Vietnam War, anti-war protests, social experimentation, sexual freedom, civil rights movement, environmental movement, women’s movement, protests and riots, experimentation with various intoxicating recreational substances
§ Key characteristics: experimental, individualism, free spirited, social cause oriented
Baby Boomer cohort #2 (born from 1955 to 1964)
§ Memorable events: Watergate, Nixon resigns, the cold war, the oil embargo, raging inflation, gasoline shortages
§ Key characteristics: less optimistic, distrust of government, general cynicism

We were the first generation to be raised on television. We were widely associated with privilege, as many of us grew up in a time of affluence. As a group, we were the healthiest and wealthiest generation to that time, and amongst the first to grow up genuinely expecting the world to improve with time.

We tended to think of ourselves as a special generation, very different from those that came before us. In the 1960s, as the relatively large numbers of us became teenagers and young adults, we, and those around us, created a very specific rhetoric around our cohort, and the change we were bringing about.

An indication of the importance put on the impact of the Boomer Generation was the selection by Time magazine of the Baby Boom Generation as its 1966 “Man of the Year”

Woodstock–Where were you?

August 11, 2009 was the 40th anniversary of Woodstock. An estimated 300,000 people attended the 3 days of peace and love. It was the defining event of our generation. Unfortunately, I was not one of them.

However, I was around in 1969, and Robert Kirkpatrick has written a book about it, titled, “The Year Everything Changed.”

It was a year when America witnessed many of the biggest landmark achievements, cataclysmic episodes, and generation-defining events in recent history.

1969 was the year that saw Apollo 11 land on the moon, the Cinderella stories of Joe Namath’s Jets and the “Miracle Mets,” the People’s Park riots, the first artificial heart transplant and first computer network connection, the Manson family murders and cryptic Zodiac Killer letters, the Woodstock music festival, Easy Rider, Kurt Vonnegut’s Slaughterhouse-Five, the Battle of Hamburger Hill, the invasion of Led Zeppelin, the occupation of Alcatraz, death at Altamont Speedway, and much more.

It is often said that if you remember the 60s, you probably weren’t there. but perhaps more important than if we remember the 60s, is the question, “What did we really learn from them?”

It was estimated that as of July 1, 2005, there were 78.2 million of us. Many of us have been married and divorced… more than once. We are the generation that pushed the divorce rate up to 50%… and made it seem “normal” and thus acceptable.

7,918 of us began turning 60 each day in 2006.That amounts to 330 every hour.

57.8 million is the number of baby boomers living in 2030, according to projections; 54.9 percent would be female. That year, boomers would be between ages 66 and 84.

Some wonder what effect the boomers are having on the economy, and will have in the future. In 2009, the economy IS the boomers! We represent the vast majority of the work force. There are 75 million of us; we ARE the economy. The huge growth in the economy since the 90s is due, in large part, to 75 million of us working up to our peak earning and spending years. What are we spending our money on? Whatever is being sold… we are buying it. What kind of cars are we buying? What kind are Detroit and Japan selling? We ARE the upper end of the automobile market. Where do we go on vacation? Everywhere. How do we get there? Every way possible. Day care centers are thriving because boomers do not want to take care of the kids they produced. And their offspring think it is supposed to be that way. (Parents are not supposed to stay home and raise their children. Why, that’s a terribly stupid idea, huh? That is what day care centers and the government is for.)

The age wave theory suggested an economic slowdown would occur when the boomers start retiring during 2007-2009. And guess what. They are right. Look at what is happening to the economy today.

As the first wave of baby boomers edges toward retirement, a growing body of evidence suggests that we may be the first generation to enter their golden years in worse health than our parents. While not definitive, the data sketch a startlingly different picture than the popular image of health-obsessed workout fanatics who know our antioxidants from our trans fats and look 10 years younger than our age.

Boomers are healthier in some important ways — we are much less likely to smoke, for example — but large surveys are consistently finding that we tend to describe ourselves as less hale and hearty than our forebears did at the same age. We are more likely to report difficulty climbing stairs, getting up from a chair and doing other routine activities, as well as more chronic problems such as high cholesterol, blood pressure and diabetes.

Researchers say the findings track with several unhealthy trends, notably the obesity epidemic. Two-thirds of Americans are overweight, and those extra pounds make joints wear out more quickly, boost cholesterol and blood pressure, and raise the risk of a host of debilitating health problems. And despite all those gym memberships, baby boomers tend to be less physically active than their parents and grandparents, their daily routines often dominated by desk jobs and the drive to and from work.

Most immediately, the Boomers will begin to draw government benefits such as Social Security and Medicare. Both entitlement programs will be exceedingly costly. In 2006, Social Security cost U.S. taxpayers about 4.2% of GDP, or approximately $554 billion. This figure is expected to increase to 6.2% of GDP by 2030, and to continue rising.

Meanwhile, the potential long-term costs of Medicare are even more severe. Currently, Medicare costs U.S. taxpayers about $230 billion per year, or 3.1% of GDP. However, these figures are expected to rise dramatically over the next 20 years as more Boomers pass age 75. In fact, government analysts estimate that by 2018, Medicare will have surpassed Social Security in terms of its annual cost.

Given these figures, the Social Security and Medicare Boards of Trustees stated in their 2007 Annual Report that, “…currently projected long-run growth rates [for the programs] are not sustainable under current financing arrangements.” Translation: Either long-term-benefits must decrease, or taxes must increase if benefits are to continue at their current levels.

For taxpayers, the Boomers’ retirement means that younger workers will have to bear a much larger burden in order to support the burgeoning ranks of retirees. Currently, there are 3.3 U.S. workers to support each retiree, but by 2030, this number will fall to only two. Given the political clout that seniors have and are likely to retain in the future, an increase in payroll taxes to support the Boomers’ needs seems entirely plausible. Extrapolated over a 10 to 20-year period, such an increase could represent a significant drag on U.S. economic growth. While increases in per-worker productivity may offset some of this burden, it remains to be seen how the U.S. will deal with what is arguably one of the most difficult financial burdens it has ever faced.

Which brings me back to the question, “What did we really learn from 1969?”

Probably the most important thing that we were able to grab onto and keep is the fact that we can’t rely on the government to provide us with everything we want. As Mick Jagger pointed out, “You can’t always get what you want, but if you try sometime, you get what you need.”

We learned that we have to take care of ourselves, but at the same time we have to have compassion for our fellow men/women.

So, we grew up helping take care of our brothers and sisters, then we started taking care of our own children. As they grew up, we expected them to help take care of their siblings, as we became two income families.

The women’s liberation movement meant that moms were no longer expected to stay home, and our want for more luxuries (which eventually became necessities) meant that one income just wasn’t enough.

And finally, as our children grew into adulthood, we thought we were done being caregivers and we could just begin to live out our empty nest years in peaceful bliss.

But as John Lennon put it, “Life is what happens to you while you are busy making other plans.”

Two things happened. First, our parents, who worked so hard to provide the best possible lives for us, and leave us with a legacy of great wealth, started living longer. And our children started having kids of their own.

As fate would have it, our children learned from us that in order to have all of the “necessities” of life, both spouses would need to work.

Thus we became the “Sandwich Generation”.

We were given the responsibility of helping to raise our children’s children and being the primary caretaker of our parents.

And now, as we enter the autumn of our lives we find that while we are much more affluent than any generation before us, the burdens and lifestyles that we embraced have also left us less healthy than the generation that preceded us. Not only that, there are a whopping 78 million of us!

With the baby boom generation aging and the cost of services going up, paying for long-term care is an issue of pressing importance for policy-makers and individuals alike. While some individuals can count on friends and family to assist with the activities of daily living, many others must determine how to pay for extended home-health services or a potential stay in a nursing facility.

In 2003, the most recent year for which data are available, national spending on long term care totaled $183 billion, and nearly half of that was paid for by the Medicaid

program. Private insurance paid a small portion of long-term care expenditures—about $16 billion or 9 percent in 2003. With the aging of the baby boom generation, long-term care expenditures are anticipated to increase sharply in coming decades. The projected

spending on long-term care presents a looming fiscal challenge for federal and state

governments. As a result, some policymakers are looking for ways to reduce the

proportion of long-term care spending financed by Medicaid and promote private

insurance as a larger funding source.

The Long-Term Care Partnership Program is a public-private partnership between

states and private insurance companies, designed to reduce Medicaid expenditures

by delaying or eliminating the need for some people to rely on Medicaid to pay for

long-term care services. Individuals, who buy select private long-term care insurance

policies that are designated by a state as partnership policies and eventually need

long-term care services, first rely on benefits from their private long-term care

insurance policy to cover long-term care costs before they access Medicaid. To

qualify for Medicaid, applicants must meet certain eligibility requirements, including

income and asset requirements. Traditionally, applicants cannot have assets that

exceed certain thresholds and must “spend down” or deplete as much of their assets

as is required to meet financial eligibility thresholds. To encourage the purchase of

private partnership policies, long-term care insurance policyholders are allowed to protect some or all of their assets from Medicaid spend-down requirements during

the eligibility determination process, but they still must meet income requirements.

In Colorado, for instance, an individual is allowed to keep a house, car, and a total of $2000 in other assets (i.e. savings, investments, etc.). A married couple can keep another $100,000 for the spouse. That would mean that if a couple was worth $500,000 (not counting their dwelling and vehicle), and one of them needed care in a nursing home, they would be required to spend $398,000 before becoming eligible for Medicaid. However, if they had purchased a Long Term Care Insurance Policy that was eligible for the Partnership program, and that policy had paid out $400,000 in benefits and then was exhausted, the spouse at home would be able to keep the entire $500,000.

Long term care insurance coverage is not cheap. In Colorado, a married couple of about 55 years of age could expect to pay around $300 to $500 per month for a good policy with one of the top rated carriers. However, if that couple decides to wait until they are 65, when you factor in inflation the cost of the policy is between $900 and $1200 per month. And that doesn’t take into account the fact that they are less likely to be able to get coverage at that age because of health conditions.

What kind of legacy do you want to leave? How do you want to be remembered? Just as we need to leave this world a better place than we found it, we need to leave our future generations in better shape than when we arrived.

America’s national debt is a record-breaking $12 trillion, and expected to nearly double in the next ten years. Unsustainable borrowing has created the largest debt in history.

It is not our fault that there are 78 million of us. We are not to blame for the fact that we are living much longer (though less healthier) lives.

However, we can do something to help not only ourselves, but our spouses, and our Children’s Children We can take responsibility now, so that we are not a burden to our families, and hopefully not contributing more to an already unfathomable national debt.

We can purchase a Long Term Care Insurance Partnership Policy, and be a part of the solution, rather than the problem.

If you would like more information about Long Term Care Insurance, please feel free to contact me at theprofessor@coloradomedicareclassroom.com.

Thanks for reading my blogs.

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