The population of the United States is rapidly growing larger and older. As we age, the need for healthcare-related services also continues to rise. According to Pew Research, American Baby Boomers (people born between 1946 and 1964) are aging at a rate that will result in one-in-five U.S. residents expected to be age 65 and older by mid-century, greater than the share of Florida’s current population of seniors. Between now and 2030, 10,000 Boomers will turn 65 every day.
Aging Of America
The population of the United States is rapidly expanding and growing older. In fact, according to the U.S. Census Bureau, the population older than age 65 is expected to grow significantly between 2015 and 2055, from approximately 48 million to almost 90 million.
Source: U.S. Census Bureau, “U.S. Population Projections,” 2012.
Spending More For Healthcare
One of the primary reasons for our advanced longevity is the increasing sophistication of medical care and technology, which is helping us live ever longer and better lives. As a result, healthcare spending has grown dramatically over the past several decades, from 3 percent of gross domestic product in 1980 to nearly 18 percent currently. Forecasters predict that healthcare spending will total more than $5 trillion and account for approximately 20 percent of GDP by 2022.
Source: Centers for Medicare & Medicaid Services, Office of the Actuary, National Health Statistics Group.
The Impact Of The Affordable Care Act
Passed by Congress in 2010, the Affordable Care ACT (“ACA”) is the most significant regulatory overhaul of the U.S. healthcare system since the 1960s. The intent of the ACA is to increase access to healthcare for millions of Americans, transform the way patients access medical care, as well as modernize and re-engineer the current infrastructure of healthcare delivery. As a result of the ACA’s broad mandate, we believe it will revolutionize the enormous American healthcare economy. It is likely that some companies will adapt and thrive in the changing environment, while others will falter and fade. Identifying the “winners” and “losers” is the key for investors seeking to take advantage of this opportunity.