State must “act now”
Medicaid: Costs for seniors are expected to more than double from $1.04 billion to $2.325 billion by 2030 Taxes: As retirees become a larger portion of the state’s population, it’s expected to drag down the annual growth rate in sales taxes by 0.3% and i
Karen Brown thought her mother was set financially. At 92, she had $750,000 saved up to live out her days comfortably.
Then her mother had a stroke. And a lifetime of savings evaporated in a few short years. First, it was $150,000 a year for round-theclock care. Then $85,000 annually as she transitioned to assisted living.
By May, Brown’s mother had spent all she had and was forced to rely on Medicaid and her daughter to make ends meet.
Imagine, said Brown, who serves on a state planning group for aging, what retirement will be like for the typical senior. About half of all households age 55 and up have no retirement savings at all, according to the U.S. Government Accountability Office.
Colorado’s aging population will have a profound impact on “virtually every Coloradan” over the next 14 years, according to a new report commissioned by state lawmakers.
And, the planning group says, if steps aren’t taken to prepare, it could have a dramatic impact on the state budget, which would see its revenue growth slow just as the costs of health care and other senior services are expected to explode.
By 2030, state Medicaid costs for seniors are expected to more than double from $1.04 billion to $2.325 billion, according to the Colorado Futures Center.
“Our leaders need to act now,” said former state Rep. Jim Riesberg, D-Greeley, who chaired the Strategic Action Planning Group on Aging.
The study group proposes a series of actions to prepare for the shifting demographics — chief among them is the creation of a new high-level position in the executive branch of state government.
“Without a coordinating office or position, it will be nearly impossible for Colo- rado to efficiently and effectively grapple with the other important steps it will need to take to prepare and plan for aging,” the report says.
The statistics are sobering:
•The demographic shift is unprecedented in Colorado history. From 2010 and 2025 the annual number of retirees is expected to increase by 74 percent compared with only a 27 percent increase in the labor force over the same time period. By 2030, the state’s senior population is projected to increase by 508,000, or 68 percent, over today’s levels.
•Even as seniors command a rising share of state services, they’ll contribute less to the state’s coffers than workingage adults. As retirees become a larger portion of the state’s population, that’s expected to drag down the annual growth rate in sales taxes by 0.3 percent and income taxes by o.2 percent.
•More seniors means more local tax breaks, as well: Anywhere from 4.7 to 10.7 percent more Coloradans are expected to claim property tax exemptions each year through 2030.
•Family members, too, will take on a growing burden. Informal caregivers in Colorado endured a cost of $3.7 billion in 2015 from lost wages, benefits and other expenses, the report says. That figure is projected to grow to $6.6 billion by 2030.
“The needs are astronomical today,” said Brown, a caregiver and the CEO and president of Seniors Matter. “In 15 years, they are going to be far beyond what we can even imagine.”
The group’s report, released at a Tuesday morning news conference, arose from the bipartisan House Bill 15-1033, co-sponsored by state Rep. Dianne Primavera, D-Boulder, and state Sen. Larry Crowder, R-Alamosa. Authored by the Keystone Policy Center, it drew on the recommendations of a 23-member study group of state officials, policy experts and senior advocates.
The report covers a wide range of topics, including transportation planning, workforce training and improving consumer protections for seniors.
It also urges taking steps to bolster Coloradans’ savings now, before today’s 50somethings retire. The most notable suggestion: a public-private partnership to create something akin to a 401(k) for workers whose employers don’t provide access to a retirement plan.
Although the report offered dire warnings for the state’s fiscal future if the rising costs of the aging population aren’t addressed, it stopped short of laying out any specific solutions on public spending.
Instead, the report urges lawmakers to do a comprehensive accounting on what the state spends on agingrelated programs. Group members pushed back against the “cynical” view that they were simply advocating for additional bureaucracy.
“We’re not standing here proposing that the state spend more money than it otherwise would spend on these issues,” said Wade Buchanan, former president of the Bell Policy Center. “I think we’re standing here proposing that the state recognize that we’re going to be spending more money just under current law.”
While Medicare costs are covered by the federal government, states contribute heavily to Medicaid, the federal program that supplements health care costs for low-income Americans. Many seniors rely on Medicaid to help with premiums, nursing facility stays beyond a 100-day limit and other out-of-pocket costs that aren’t covered by Medicare.
Buchanan said he hoped lawmakers and state officials would use the report as a call to make government more efficient and to take concrete steps to keep people in their homes longer.
“If we ignore these issues, we are certain to be spending lots more money on this,” Buchanan said.