Saturday, March 14th 2020
Why Is the Cost of Healthcare Going Up?
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Why Is the Cost of Healthcare Going Up?
Why Is the Cost of Healthcare Going Up – Introduction:
As insurance brokers, WeExpats often gets asked, “Why is the cost of healthcare going up?” This isn’t just an increase to cover the normal rate of inflation. The price of healthcare has skyrocketed in the last year.
We have been quoting some clients 40% higher rates than they paid last year for the same coverage. They are in shock, and frankly so are we. Deductibles are going up, prices are going up, and many of our clients have been reaching out to us asking, Why is the cost of healthcare going up?
It has to do with the Baby Boomers. After World War II, as the soldiers who had survived were returning home, there was a massive increase in the birth rate. This “Baby Boom” led to history naming that generation the Baby Boomers—or “Boomers” for short. Typically, the Baby Boomer generation is listed as 1946 to 1964.
In 2011, the first of the Baby Boomers began turning 65 (which is the standard retirement age in the United States, though some obviously work for more years while others retire early). Since then, 10,000 Baby Boomers are turning 65 and reaching the age of retirement—each day.
This has pushed the resources to the limit. The more demand for the resources, the greater the cost. Such is the strain that if things continue, the healthcare system in the United States could reach a breaking point.
As the American healthcare industry approaches this breaking point, this has resulted in raised taxes, raised inflation, and a reduction in healthcare benefits for everyone.
Why Is the Cost of Healthcare Going Up – Raising Healthcare Costs:
The Congressional Budget Office (CBO) reported that in 20019, the Medicaid, Medicare, and overall healthcare costs add up to 3% of the United States’ GDP. If no changes in the American healthcare system take place, the spending for just Medicare would cost 8% of the GDP by 2035—and 15% by 2028!
This is not the only answer to the question, Why is the cost of healthcare going up? In addition, the tools that American infrastructure have are unequipped to handle a massive percentage of the population being elderly.
For example, the number of geriatricians is decreasing. There are fewer doctors that specialize in aging than before. To make matters worse, the elderly are living longer, and the elderly need more medical care than youths, therefore this will only tax resources further.
New technologies in automation and advances in medicine are making the future of healthcare look more like one of prevention as opposed to our current model which is based around crisis care.
Why Is the Cost of Healthcare Going Up – More Medical Attention:
This increase in medical attention needed to the Baby Boomers will bring forth a multitude of medical advances in biomedical technology. Automation will have to carry the burden leftover from the lack of resources.
The Baby Boomers will provide a financial incentive toward tapping this burgeoning market. Older people are economically and financially stable. This will create business opportunities and jobs.
Healthcare, wellness, and vitality industries will boom in the coming decades. Pharmacies and grocery stores will have to step up to accommodate their needs. Medical records will require shared access.
Ultimately, the Baby Boomers will require more medical attention and health/wellness services than ever before. This progression is happening now, which is only beginning to drive up the costs of healthcare.
Why Is the Cost of Healthcare Going Up – How This Affects Mexico:
The simple fact of the matter is that much of these medical resources will be prized possessions as the competition increases with the aging Baby Boomers. Many of these resources in Mexico come from the United States.
As the prices of these resources in the United States are raised because of competition, that drives up the cost of healthcare for the consumer—both in the United States and in Mexico. In the coming decades, we will have to completely restructure our healthcare system or pay exorbitant prices for basic healthcare.
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