Although insurance companies have been saying it for years, it has finally come to pass: baby boomers nearing retirement age are adding the most to health care costs. According to a recent survey by the New York State Conference of Blue Cross and Blue Shield Plans, the number of privately insured 45-to-65-year olds rose by 14.8% in the 1990s, compared to 3.6% for those covered by Medicare. Because average insurance claims for patients aged 45 to 64 are 1.2 to 2.4 times higher than the average insured adult, this means more boomers are using the health-care system more than ever before. The bad news is that the worst is yet to come-when people hit 65, claims costs are often triple the average.
In addition to the sheer number of aging boomers, other factors also play a role-including medical technology advances that will allow boomers to live longer than previous generations. In addition, the increased amount of health information now available results in well-educated consumers who know more about expensive cutting-edge tests and techniques.
Although it is not known exactly how aging baby boomers will affect health care premiums, the expectation is that premiums will increase as aging boomers use more services, which drives up costs. According to actuaries, the aging population raises premiums by as much as a half a percentage point each year-a rate that will increase more rapidly as boomers age. The big question is how Medicare will transform itself to serve baby boomers turning 65-a complex task that must be done within the next decade if Medicare is to survive.
From the January 25, 2001 article, "Boomer Treatments Up Health Costs," by Danielle Kost, Democrat and Chronicle, Rochester, NY