The aging of America, driven by the relative size of Baby Boomer generation, has us hurtling toward a “gray trap” (or staring down a “silver tsunami," if you prefer). We stand at a precipice in 2025, with 75 percent of Boomers aged 65 or older. From thirty years ago (1995) to projections of thirty years from now (2055):

Each of these figures is interrelated and indicative of a distinct challenge. The growing number of seniors will require a growing population of caregivers, which takes away labor from the rest of the economy. Payroll taxes are a significant funding source for Medicare, so as more people exit the workforce for their own retirement or to care for their retired parents, Medicare funding will depend more on general taxation to cover its increasingly large expenditures. And these expenditures will grow not only because more people are on Medicare, but because the average age of Medicare enrollees is going to increase rapidly in the coming decades. Boomers are expected to live longer but with worse health than previous generations, which is a product of and a driver for more medical care.
 
The aging of America is predetermined (give or take net migration), but our strategic decisions are not. For providers, now is the time to figure out how to get by on Medicare (and Medicare Advantage) margins, because the share of Medicare patients will only grow, while the generosity of Medicare reimbursements will be perpetually targeted for cuts. At the same time, policymakers are likely to push for greater personal contributions to healthcare whether through higher premiums, cost-sharing, or means-testing of benefits as public financing strains under demographic pressure. The future may seem dark and gray, but this may prove to be the crisis that spurs innovation toward a better system of care.