(The Center Square) — As Colorado’s older population continues to grow, a recent report found the state is unprepared for the increasing costs associated with its aging population.
The report from the Colorado Fiscal Institute found that the state will face a dual challenge of ever-increasing needs for services like Medicaid, all while the state sees slower revenue growth.
The Center Square spoke with the report’s authors about these challenges.
“The revenue implications of an aging population are quite serious. We know that older adults spend their incomes on different things than younger populations, which will have the effect of shrinking the growth rate of certain revenue sources,” said Kendall Stephenson, one of the authors and the institute’s senior fiscal policy analyst. “At the same time, the state will need to spend more on services for older adults. So we have a situation with two simultaneous things: slowing revenue growth, but more public dollars needed for key services for older adults.”
The report found that in Colorado, while the working age population is expected to grow by 12% in the next 10 years, the number of adults 65 or older will increase by nearly 30% over that same period.
Some counties will see even more drastic changes. For example, Weld County is expected to see a 46% growth in its 65+ population by 2035.
“The U.S. has a population that is living longer and an impending retirement crisis,” Stephenson said. “This really is something that affects almost every single person who has family in this state or anyone who intends to retire and live out the remainder of their life here.”
Subsidized medical insurance funding is one of the most concerning aspects of the issue, with the report finding that Colorado will need an additional $419 million by 2035 and more than $688 million by 2050, to meet its share of long-term care Medicaid costs for older adults.
This calculation was based on current demographic projections and existing federal funding commitments.
Shana McClain, one of the report’s authors and the institute’s research manager, said Colorado needs to take action now, especially to address health care.
“Older adults make up just 3% of enrollees but account for 15% of total state spending [in Medicaid], primarily driven by long-term care and other health-related needs,” McClain explained. “Health care is already the largest line item in the state budget, and to suggest this situation is manageable without meaningful policy change is to ignore the reality we’re facing.”
The institute prepared the report on behalf of the Denver Regional Council of Governments Advisory Committee on Aging and AgeWise Colorado.
“What this report makes clear is that we’re not just facing a demographic shift. We’re facing a policy failure,” said Bob Brocker, president of AgeWise Colorado. “Older adults want to remain in their homes and communities, but without stronger support systems and sustainable funding, that will be out of reach for too many.”
Housing is another critical issue the report highlighted. It found renting among older adults is rising, with some regions seeing double digit increases since 2012. Less home ownership and more renting signals more housing uncertainty.
The report blamed much of the underfunding on state policy.
“It is our position that we do, in fact, have a revenue problem in this state,” Stephenson said. “This is not due to any ‘overspending,’ which we occasionally hear … There is simply no way to plan for the future, including the future needs associated with an aging population, if we are in an environment of austerity.”
The report also called for immediate changes to the state’s budget, including the Taxpayer’s Bill of Rights. Currently TABOR limits state revenue growth and requires excess revenue to be refunded back to taxpayers.
“We have to make changes to TABOR. There really is no way around it,” Stephenson said. “Let’s actively plan for the future instead of lurching from crisis to crisis, constrained by a budget process that is reactive, short-sighted and fundamentally incompatible with the long-term investments Coloradans so clearly require.”
McClain said every Coloradan should be concerned about this issue.
“Even if aging doesn’t feel personally relevant to all Coloradan’s right now, most of us have parents, grandparents or loved ones who are directly impacted, and one day, we will be too,” she said. “Investing in older adults today is not only about being compassionate. It’s also a strategic investment in the kind of future we’re hoping to build for ourselves.”
