Rob Stein of the Washington Post published a thoughtful article last Friday on some recent research which suggests that baby boomers are moving into their elder years in poorer health than today’s seniors did.
The Post article concentrates on the health questions involved, and only touches lightly on what the political and economic implications might be if this finding is corroborated. Those implications are significant. If the largest generation in American history turns out to be more disabled and unhealthy than expected, the impact on society will be enormous.
And the implications for insurers could be substantial. Actuarial projections for the life insurance industry may need to be significantly revamped, causing reportable accounting changes under Sarbanes-Oxley. Risk projections for Medicare wraparounds and other projects will change. The economic prospects for disability insurers may already be changing.
For one thing, Social Security projections might need to be re-evaluated. Politicians have tried to raise alarmist questions about the Social Security system for a while now, although it looks to be solvent for several decades to come. While a decline in baby boomer health status might affect Social Security, it’s unclear at this point whether it would have a major negative effect on Social Security solvency, a minor one, or none.
It’s even possible that these figures might actually prolong the solvent life of Social Security, but at a high cost. If mortality rates jump for baby boomers – in other words, if they die sooner than expected – Social Security payouts could be less than projected. The actuarial estimates behind our budget projections will prove pessimistic if life expectancy figures turn out to be optimistic.
On the other hand, use of medical services could jump if baby boomers are sicker and require more care than their predecessors. That means a rise in public medical expenditures. The Federal government already pays for roughly two-thirds of all medical care in the U.S., and that figure could jump dramatically.
The pain would not be shared equally among all income groups, either. If out-of-pocket costs under Medicare aren’t reduced, poorer Americans will suffer more. And the other costs of disability – e.g., limited access to the activities of daily living – are already being disproportionately felt by lower income citizens. (See “Gradients of Disability Across the Socioeconomic Spectrum.”)
Before projecting the impact of this trend on other sectors of society, however, the question has to be asked: Is it true? Is the Baby Boom generation sicker or more disabled that its predecessors? Sadly, the tentative answer appears to be yes. The University of Michigan’s Health and Retirement Study, which is the main source of the Post article, seems to have made some compelling findings over the last several years.
My first thought (and possibly yours) was that these findings could represent higher expectations for health on the part of boomers, rather than lower actual health findings. While the results are self-reported, however, they don’t appear to be restricted to the wealthier segments of society where those expectations would probably exist. And they’ve been replicated by several other studies.
In other words, we’re not necessarily talking about latté-sipping yuppies. We’re talking about Americans across a broad range of income levels and social groups, born between 1948 and 1960, who are less healthy than their predecessors. Why?
For one thing, income levels between rich and poor is growing wider. That leaves more people working harder for less income, and less able to provide themselves with a healthy way of life. For another, people are working harder. While the economic data are difficult to interpret, there is reason to believe that employed people are working longer hours (while the unemployed are subject to the stress of financial uncertainty).
Even the latté crowd may not be immune from the ill health effects of wealth and technological change. Cell phones, laptops, and PDAs have created the longer hours, constant anxiety, and lack of true downtime that seem endemic in so many well-paying jobs these days. The health toll of 24/7 connectedness to high-stress jobs has yet to be measured, as far as I know, but it could be significant.
Which remains me of Lily Tomlin’s classic line, when she was in character as a high-achieving career person and “Supermom”: “If I had known what it was like to have it all, I’d have settled for less.”
Health trends among baby boomers at all income levels bear watching. They will have implications for everyone, not just the boomers themselves. And younger generations thought it was bad just having to listen to all that 80’s music …
(an abbreviated version of this item appears on The Huffington Post)
The Sentinel Effect 