COVID-19 is exacerbating many things, but one that is flying under the radar right now is a pending, unprecedented wealth transfer from old to young. The transfer of wealth from the Boomer generation to Millenials was already being discussed in 2014 due to its shear size (somewhere between 30 and 60 trillion dollars). While some people predicted it wouldn’t be as large because of rising health care and long-term care costs, those will be cut short by the disease.
This is important for a few reasons. First, COVID-19 wiped out any senior care center it touched. These centers all too often make their money by sucking the benefits from their members, to the point they have no wealth left to transfer to heirs. Now that many of the members have died, there will be a transfer of funds surviving family members, likely to spur a bit of the economy. Because COVID-19 hit the older population much more so than younger, it’s not a surprise that the economy can bounce back faster than expected.
Given the poor performance of senior centers, I would expect many people to be hesitant to trust them with aging boomer parents in the future. Once the full truth comes out, especially about how places like Michigan and New York knowingly put COVID-positive seniors back in homes, it will become the scandal of 2020. I’d expect to see a rise in senior centers that boast a better cleaning and isolation regiment, as well as people adding mother-in-law suites to provide for parents in the future.
Lastly, COVID-19 is likely to spur quick changes on Medicare. Medicare as a program has never been setup for long-term success. Taxing the working people to pay for seniors only works if you have a large, growing population and a relatively short lifespan. Given that people live longer and have less children, those economic don’t work when health care costs rise. But COVID-19 exposed medical treatment costs as perhaps more driven by red tape than anything else. Regardless, the lack of taxpayer funds due to unemployment will likely bring in some much needed change to the system.
This post represents the views of the author and not those of the Department of Defense, Department of the Navy, or any other government agency.