A few months ago I was waiting to board a flight to Miami from Phoenix. One gentleman in front of me told another, “We’ve got a lot of pre-boards.” In this case the pre-board passengers were all elderly, with many in wheel chairs. The other chap replied “It happens every time I fly to Florida.”
Just wait until you are boarding a plane in 2030.
The United States Census Bureau has created projections regarding the age demographics of states. The chart below plots the projected increases in these two populations for each state. The states in the top right section are expected to have the largest population growths. States on the bottom left will see either smaller increases or even decreases in their populations. New York, for instance, is projected to have a large increase in its elderly population moderated by lots of retirees moving to Florida, combined with a slight overall decline in its youth population. The projections for Florida show a large increase in the youth population and a truly stunning increase in the elderly population.
Florida has long been blessed to be a desirable retirement destination. One of my grandfathers, for instance, retired to the Florida Keys and spent his golden years clubbing the occasional shark with his oar as he canoed around Summerland. Economists, however, study “age dependency ratios” because societies with high percentages of young and old people face stark challenges. Older people tend to be out of their prime earning years and thus their prime tax paying years, and often draw upon public assistance for health care expenses. Young people pay negligible taxes, often draw upon public health-care resources and almost always K-12 education funding.
Having a high proportion of elderly people combined with young people puts quite a strain on working age people, who pay the taxes necessary to support Medicaid, K-12, public universities, etc.
The Census Bureau projects a large youth population increase for Florida, but even that increase pales in comparison to the projected increase in the elderly population. These projections carry with them profound implications for public policy in Florida.
Some of your minds have surely wandered off to the federal government’s balance sheet problems. With big problems looming for Social Security and Medicare, this is understandable, but keep your focus for now on the state budget. Why does an aging population matter to a state budget? We made reference to the revenue implications earlier, but the main impact comes from the Medicaid program.
The Kaiser Family Foundation projected out average federal spending on Medicaid per enrollee in the above chart. Medicaid operates as a joint state-federal program through matching funds- the state puts up money, the federal government matches it. It is already the case that while a majority of the Medicaid enrollees are not elderly, a majority of Medicaid money goes to elderly patients.
Notice that the average cost per enrollee projects out over six times higher for the elderly as compared to a child by 2023. Bad news indeed if your state’s elderly population is surging. Note also that many of Florida’s growing youth population will also qualify for Medicaid assistance- their costs however will not begin to match those of Florida’s elderly.
Florida will simultaneously be attempting to cope with surges in its youth and elderly populations. In our next exciting blog episode we will discuss those projections, and the looming battle for scarce public dollars between health care and education, the old and the young, and how state policy will address these issues.
About the author
Dr. Matthew Ladner @MatthewLadner
Dr. Matthew Ladner is the Senior Advisor of Policy and Research for the Foundation for Excellence in Education. He previously served as Vice President of Research and Goldwater Institute. Prior to joining Goldwater, Dr. Ladner was director of state projects at the Alliance for School Choice. Dr. Ladner has written numerous studies on school choice, charter schools and special education reform. Most recently, Dr. Ladner authored the groundbreaking, original research Turn and Face the Strain: Age Demographic Change and the Near Future of American Education, outlining the future funding crisis facing America’s K-12 public education funding. He also coauthors the American Legislative Exchange Council's annual Report Card on American Education: Ranking State K-12 Performance, Progress and Reform. Dr. Ladner has testified before Congress, the United States Commission of Civil Rights and numerous state legislative committees. He is a graduate of the University of Texas at Austin and received both a Masters and a Ph.D. in political science from the University of Houston. Dr. Ladner is a Senior Fellow with the Foundation for Educational Choice. He lives in Phoenix, Arizona.