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Baby boomers make state decisions difficult

ST. PAUL – Baby boomers will make writing the state budget harder, reduce the Minnesota labor force and cause state health care spending to soar, State Demographer Susan Brower said.

“Aging pressure” is how Brower termed the issue.

The demographer said aging boomers will “place new pressures on the state budget, especially in the areas of health and long-term care.”

An older population means more money would be needed for a Medicare supplement program, she said, as well as programs that fund health care needs of elderly, poor and disabled Minnesotans.

One of the big issues will be state funding for long-term care, such as nursing homes. Brower presented numbers showing that a third of baby boomers do not know how they would pay for long-term care and nearly 20 percent expect to just rely on government-paid programs.

If the state is to pay health expenses, she said, legislators need to understand that those costs rise dramatically as a person ages. Annual health care costs are $6,500 for those ages 45 to 64, she said, but soar to $10,700 for those older than 65.

While baby boomers head to retirement and wait in doctors’ offices for care, they will leave behind a gap in the state workforce.

Brower said the nearly 1.5 percent annual growth in the workforce size from the late 1990s will shrink to 0.2 percent by 2025. As that creates a worker shortage, Brower said, education needs to pick up the slack to train more efficient workers.

Rep. Paul Marquart, DFL-Dilworth, said what population growth there is will come from minorities such as Hispanic and black Minnesotans, so the state education system needs to make sure they learn as well as white students.

“That will be huge for economic competitiveness,” Marquart said.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.