I have long advocated that people prepare for the future rather than merely take what outcomes the future has in store for them. One area that particularly concerns me is the potential use of long-term care services.
According to the Social Security Administration’s Life Expectancy Benefits Planner, men aged 65 can expect to live, on average, to 84.3 years. On the other hand, women aged 65 can expect to live, on average, until age 86.6 years. These are just averages. One out of every four 65-year-olds today will live past age 90, and one out of 10 will live past the age of 95.
The use of long-term care services is skyrocketing, as is the cost for those services. If you are not prepared for this situation, you could either be severely impacted financially or, worse, be unable to get the care you require.
There are three trends that concern me:
1. The probability of needing long-term care services is roughly proportionate with age. For example, according to medicaid.gov, an 85-year-old has an 85 percent chance of using some level of long-term care services before they die. So, as our average life spans increase as noted above, a larger percentage of the elderly population will require long term care services than ever before.
2. As you know, the baby boomer generation has begun to retire, with the first boomers (those born in 1946) hitting age 72 this year. According to the U.S. Census Bureau, there are well over 75 million baby boomers, so the number that will ultimately need long-term care services is likely to be huge in relation to the availability of such services.
3. While neither Medicare nor Medicaid pay for home care or assisted living services, Medicare pays for some nursing home care under certain circumstances and Medicaid pays for nursing home care for indigent persons. As our population ages and the use of long-term care services expands, state Medicaid programs are running short of funds and, as a result, are reducing daily payments to nursing homes almost every year. Given that Medicaid covers about 70 percent of all nursing home patients, nursing homes are finding themselves unable to survive financially on these limited reimbursements for 70 percent of their business and many are closing their doors.
So, the picture is basically this: The probability of using care is increasing, the length of time one is using care is increasing, the percentage of our population in the age group most likely to need care is increasing and the amount that Medicaid can pay for care on an individual case basis is decreasing. As a result, nursing homes are going out of business. Not a pretty picture.
My advice for you is to either sequester sufficient resources to pay for care in the future and not tap these funds for other uses, or secure some form of insurance coverage to pay for these services should the need arise. If you don’t adopt one of these two strategies, you put yourself in the position of either bankrupting yourself trying to pay for care (which will get much more expensive in the future) or relying on Medicaid to pay for your care, which is problematic at best. Worst case — you just cannot get the care you need. Talk with your insurance professional about the various insurance plans and products that are available to determine which approach might work for you.
(Certain information found at http://a.msn.com/00/en-us/BBJN9HD?ocid=se)