The Future of Medicare: Trends and Predictions for the Coming Decade

For an insurance agent, understanding the trends affecting Medicare and its beneficiaries is key. Being aware of the predictions will help you understand current and future markets and how you can better serve them.

According to the National Library of Medicine, the comparison of a typical elderly Medicare beneficiary in 2010 and 2030 helps show how changing demographics affect the future of Medicare. The National Library of Medicine also believes that the typical elderly beneficiary will still be female but slightly younger, less likely to be white, more educated, more likely to not be a smoker, more likely to be obese and more likely to be disabled or have a chronic condition.

Baby Boomers will continue to drive Medicare enrollment growth, according to the National Library of Medicine. It says that the estimated U.S. population of adults 65+ will double in size between 2010 and 2030. This means the influx of those looking for assistance will keep increasing in the next 7 years, so as an agent, you need to make sure you have all the resources possible available to you and your potential clients.

By 2030, people will be living almost a full year longer on average. However, the likelihood of having a disability will go up significantly, according to the National Center for Biotechnology Information. The expected years of life with a disability will also increase from 6.3 in 2010 to 7.4 in 2030. This increases the overall cost for Medicare due to the level of care needed on average for a beneficiary.

Originally Medicare was enacted to provide older low-income Americans with access to expensive medical care. All Americans were historically paying the same tax rate to fund Medicare Part A, which specifically covers hospital care. There hasn’t been a cap on the amount of Medicare earnings taxed since the early 1990s, so according to the National Library of Medicine,  higher-income Americans have shouldered a larger burden to funding Medicare.

There’s a large gap between life expectancies of high-earning Americans and low-earning Americans. This means most Medicare benefits will go to wealthier Americans, which goes against the very purpose of Medicare to begin with. Therefore, the National Library of Medicine says that the Medicare program is becoming less progressive over time.

It’s important for Medicare insurance agents to understand and anticipate changes in the market. Knowing who your potential future clients are and the discrepancies between them will aid you in providing higher-quality services.

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Source: Gaudette, Étienne, et al. “Health and Health Care of Medicare Beneficiaries in 2030.” Forum for Health Economics & Policy, Dec. 2015, www.ncbi.nlm.nih.gov/pmc/articles/PMC4845680/.