Hawaii’s aging population strains Medicare and housing by 2035

Hawaii’s aging crisis threatens its economy by 2035—can reforms save it?

Hawaii is bracing for economic challenges as its population ages faster than most of the US. By 2035, one in four residents will be 65 or older, putting pressure on housing, healthcare, and workforce stability. Lawmakers are now pushing for sweeping reforms ahead of a predicted mild recession next year.

The state’s upcoming 2026 legislative session will focus on housing affordability, tourism instability, and job market shifts. Meanwhile, Gov. Josh Green has proposed a $10.58 billion budget for 2027, with major investments in infrastructure, construction, and healthcare to stabilize the economy.

The financial strain on seniors is growing. Social Security, Medicare, and Medicaid—key supports for older residents—face long-term sustainability issues. The shift from pensions to 401(k)s has also left many workers more vulnerable in retirement.

In districts like Waikiki, where nearly half the residents are seniors, the effects are already visible. Rep. Adrian Tam (D-Waikiki) highlights struggles in staffing hospitals and essential services as the older population expands. The number of residents aged 75 and above is rising sharply, increasing demand for medical and long-term care. Housing costs have spiralled out of reach for many. State Sen. Stanley Chang pointed to his father’s experience: decades ago, a single state salary could buy a home, but today, Chang would need 40 years of his full salary to do the same. This crisis is pushing working families to consider leaving the state, warns UHERO associate professor Colin Moore. Without stronger policies—like paid family leave—he fears Hawaii will lose its younger workforce. To address these challenges, lawmakers are exploring a ‘cradle-to-grave’ strategy. State Sen. Sharon Moriwaki (D, Waikiki) advocates pairing housing solutions with workforce development and education reforms. Another key step is the Hawaii Retirement Savings Program, set to launch in mid-2026, offering private-sector workers without employer plans a way to save for retirement. Behind these efforts is research from economists like Andrew Mason, a professor emeritus at UHERO. His report, Aging and Hawaii’s Generational Economy, projects that by 2050, the gap between what seniors consume and what they earn will nearly double. Mason, son of renowned demographer Ronald Lee, has long studied how aging populations reshape economies. Gov. Green’s latest budget proposal includes $903 million in new bonds to fund critical projects. The aim is to ease economic pressures by boosting construction, healthcare, and housing—sectors under the most strain from demographic shifts.

Hawaii’s aging population and economic pressures demand urgent action. The 2026 legislative session will tackle housing shortages, healthcare needs, and job market changes as the state prepares for a recession. Success depends on balancing support for seniors with opportunities for younger workers to build stable futures in Hawaii.