The social and economic implications of an aging population are profound. In a rapidly aging state like New Hampshire, where lawmakers continually squeeze hospitals, nursing homes and Medicaid payments, the implications could be profoundly depressing. Unless public officials start thinking now about how to provide and pay for health care and other public services, the needs of elderly residents threaten to overwhelm the state.
If that sounds alarmist, consider the demographic facts presented by the New Hampshire Center for Public Policy Studies in a new report that warns of a “silver tsunami.” The number of New Hampshire residents over age 65 is expected to almost double over the next 20 years, to nearly half a million people. By 2030, they will represent a third of the state's total population. In Grafton County, 33 percent of residents will be over 65, according to projections; in Sullivan County, 36 percent will be.
New Hampshire isn't alone. Vermont's older adult population is also growing at a rapid pace. The trend, common throughout New England, is a consequence of sluggish population growth, declining birth rates and, of course, the aging of the now-inaptly-named baby boomers, the oldest of whom have turned 65. In less than 10 years, the number of people entering the labor pool across New England will be smaller than the number retiring.
Vermont, at least, appears to be thinking about the demographic shift. For example, some years ago it instituted a program aimed at lowering the cost of chronic diseases, which afflict the elderly in particular. Is New Hampshire making any preparations?
Among other things, the increasing elderly population will have a major impact on Medicaid, the government health insurance program for the poor and disabled, which represents a sizeable share of the budget. Today, the majority of Medicaid payments, split between the state and federal government, help those under age 65; by 2030, however, more than half of all state Medicaid spending will go toward poor and disabled residents over 65 -- people who have more, and more expensive, medical needs. Expenditures associated with long-term care, a costly service, will increase dramatically. That's bad news not only for the state but also for the counties, which bear the brunt of nursing home expenses.
New Hampshire's Medicaid program is already under stress: State reimbursement rates are among the lowest in the country, and the Legislature routinely picks away at the program. The Center for Public Policy Studies poses the critical question: What will happen to Medicaid as New Hampshire's population ages?
If the management of Medicaid presents one challenge, the increased use of Medicare, the federal insurance program for the elderly, presents another. As more people come to rely on Medicare, hospitals stand to lose money, because Medicare reimbursements, like Medicaid reimbursements, are lower than private insurance payments. Hospitals such as Dartmouth-Hitchcock Medical Center will either have to lower their costs or shift more expenses to private insurers or both. In other words, expect premiums to keep rising as the population ages, warns the Center for Public Policy Studies. You can also expect a shortage of physicians and caregivers, unless changes are made to medical education and recruitment.
Just how the federal Affordable Care Act plays into all this isn't clear. But lawmakers and taxpayers had better plan for the silver tsunami, which will wash over almost every aspect of state government, including corrections. If the social contract is to be honored, as it must, the demographic changes won't be cheap. And everyone may have to face the fact that more of society's resources will be expended on the elderly than invested in the young. That’s a worrisome trend indeed.