Changing Demography and Your Future

The United States is experiencing a demographic upheaval. This enormous shifting of populations, generations and cohorts will redirect the course of our economy, commerce, culture and government. While most of this change is good news overall, the perils of not understanding this transformation are profound. Especially on the part of our policy makers and President Obama.

The U.S. healthcare industry  has proven to be very vulnerable to the shifting sands of demography. When the massive block of 80 million Baby Boomers born 1945 to 1964 dominated the 20- to 40-year-old segment of the U.S. twenty to sixty year old labor force our current private shared risk, insurance-based healthcare model was very successful. Boomers were paying insurance premiums into the system and not using many of the services.The tiny Silent Generation born 1925 to 1944, occupied the forty to sixty year-old segment of the labor force. The Silents because of their age, used more services than they paid for in premiums but the Boomer Generation more than made up for this deficit. This demographic fact kept insurance premiums low and healthcare service providers profitable. Starting in 1984 The Boomers began to populate the 40- to 60-year-old segment of the labor force and the value of the medical services they used began to exceed what they were paying in premiums. The private shared risk insurance model began to fail. The young healthy generation right behind the Baby Boomers, Generation X, which is about 9 million people smaller than the Boomer Generation, is too small to compensate for the Boomers’ escalating utilization of medical services.

Now Generation Y, the largest generation in American history, born 1985 to 2004, is beginning to enter the workforce at the entry level and all bets are off. In addition millions of Generation Y will begin to start their own businesses because they are facing 20% unemployment at entry level and they have to eat. Couple this with forty-five million assimilating young Latino immigrant populations and the socioeconomically advancing African American cohorts that number over forty million and you have a complex private healthcare insurance marketplace that will surely begin to expand. In short, millions of new very desirable young healthy potential customers will be flooding the private shared risk insurance based model. And all of this will take place without a single piece of legislation or government involvement. Imagine that. Our current private healthcare system here in the United States is not broke, it has just suffered a bit of a set back that will self correct as our demography shifts. 

Pending federal and state legislation poses a significant threat to the viability of the private shared risk insurance model here in the United States. Passage of this legislation can easily lead to unfortunate socialized medicine environments similar to Canada and Great Britain. Our state and federal legislators need to make informed voting decisions based on good demographically based information. This information is simply not in their hands. Maybe someone knows how to make this blog mandatory reading for our senators and congressmen?