But the root of the issue, he says, is elderly care. According to the U.S Bureau of Economic Analysis, in 2012 the US spent $2.37 trillion on healthcare expenditures. That same year, he says, CMS did a study on the usage of healthcare by age class and found that $190 billion of the expenditures were for people over the age of 85. “Given that the US Census estimated there were 5.8 million Americans over the age of 85 in 2012, that translates into $32,411 we spend per year or $88.80 per day to treat each American over the age of 85.”

Additionally, he says, 34.5% of the total healthcare spending occurs from people over the age of 65 even though they represent only 13.7% of the population. “With the increase in healthcare expenditures, the amount per person has only gone up since 2012 and is continuing to rise faster than our economic growth.”

But Signor warns that the real healthcare problem is still coming. “What's interesting is that the compounded annual growth rate of the 85+ population has been declining the last several years and is expected to actually drop below the overall US population growth in 2019 before rising dramatically,” says Signor. “The reason is the first Baby Boomer was born in 1946 and will not turn 85 until 2031. The much smaller Silent Generation (think Baby Boomer parents) are the age group currently in the 85+ category, but once the Baby Boomers hit the age of 85, we will have a crisis on our hands. Between now and 2060, the US population is expected to grow at 27% compared to the 85+ population growth of 201%. There will not be enough healthy people to subsidize the sick and elderly.”

What can we do to fix the problem? Check back with GlobeSt.com for part 2 of this article, which dives further into that point. And also, keep an eye for the upcoming November/December issue of Real Estate Forum, where we five deeper into legislative issues and future of the sector.

Part 1 of 2

SCOTTSDALE, AZ—Like most Americans, Jason Signor, CEO of Caddis, is worried about the rising cost of healthcare. But the terrible news, he says, is that the real healthcare cost problem has not even gotten here yet.

The CEO of Caddis will speak at the upcoming RealShare Healthcare event here next week, which will bring together more than 400 of the industry's top owners, investors, developers, brokers and financiers as they gather and share their insight and outlooks for the marketplace for the Healthcare event of the year.

“I am tired of our health premiums going up. As a business owner, the last few years I've had to make the tough decision of raising premiums to our employees, increasing deductibles, or having our company absorb the increase,” he tells GlobeSt.com. “Unfortunately, our company's health premiums have gone up an average of 17% each of the last four years while maintaining the same benefit plan. A 67% increase in insurance premiums over a four year period is not sustainable. I guess ACA forgot that affordable stood for the first part in the acronym…. OK, bad joke.”

But the root of the issue, he says, is elderly care. According to the U.S Bureau of Economic Analysis, in 2012 the US spent $2.37 trillion on healthcare expenditures. That same year, he says, CMS did a study on the usage of healthcare by age class and found that $190 billion of the expenditures were for people over the age of 85. “Given that the US Census estimated there were 5.8 million Americans over the age of 85 in 2012, that translates into $32,411 we spend per year or $88.80 per day to treat each American over the age of 85.”

Additionally, he says, 34.5% of the total healthcare spending occurs from people over the age of 65 even though they represent only 13.7% of the population. “With the increase in healthcare expenditures, the amount per person has only gone up since 2012 and is continuing to rise faster than our economic growth.”

But Signor warns that the real healthcare problem is still coming. “What's interesting is that the compounded annual growth rate of the 85+ population has been declining the last several years and is expected to actually drop below the overall US population growth in 2019 before rising dramatically,” says Signor. “The reason is the first Baby Boomer was born in 1946 and will not turn 85 until 2031. The much smaller Silent Generation (think Baby Boomer parents) are the age group currently in the 85+ category, but once the Baby Boomers hit the age of 85, we will have a crisis on our hands. Between now and 2060, the US population is expected to grow at 27% compared to the 85+ population growth of 201%. There will not be enough healthy people to subsidize the sick and elderly.”

What can we do to fix the problem? Check back with GlobeSt.com for part 2 of this article, which dives further into that point. And also, keep an eye for the upcoming November/December issue of Real Estate Forum, where we five deeper into legislative issues and future of the sector.