Long-Term Care is a Ticking Time Bomb for Baby Boomers

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Baby Boomers are living longer and enjoying more good health than their parents. But sooner or later, most of us will likely need long-term care. And let’s face it – we are unprepared for this cost which can easily consume all our assets. Moreover, on a national basis, the country is ill-equipped to handle the long-term care needs of our generation.

How Much does It Cost to Live in a Nursing Home?

According to Google, “These costs can be staggering. In 2012, a private room cost an average of $248 daily, or more than $90,500 annually, according to a 2012 survey by MetLife. A semi-private room ran $222 daily, or more than $81,000 per year.” And costs have increased since 2012!

Does Medicare Help?

Medicare will only pay for care in Medicare-certified skilled nursing facilities or through Medicare-certified home health or hospice agencies. It will not pay for care in a continuing care retirement community or in an assisted living facility.

Medicare Part A covers up to 100 days of “skilled nursing” care per spell of illness. However, the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent.

Does Medicaid Provide Anything?

Yes, Medicaid can be used to pay for long-term nursing home care in all states. Many states also allow their residents to use Medicaid waivers to pay for assisted living or in-home care if the services can be obtained at a lower cost. Each state has individual rules, regulations and eligibility requirements.

Medicaid eligibility depends on financial resources and assets. They will examine your finances for the past five years to ascertain what can be used to recover costs. If you own a home, that is usually protected while you are alive. But most other assets are up for grab. Once a Medicaid recipient dies, the state will go after their estate to further recover costs. It is best to clarify your options to protect an estate now while you are healthy.

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The Bottom Line for Baby Boomers

A tsunami of Baby Boomer retirees is about to overwhelm the nation’s long-term care resources. Only the wealthy can afford long-term care insurance and its ever-increasing premiums. Don’t count on this being a solution for the average Boomer on the street.

There are few long-term care solutions for the majority of Baby Boomers. As a country, we have yet to address the huge financial cost of caring for tens of millions of Boomers in their old age. Our nation has turned a blind eye to this looming crisis.

According to AARP, most Boomers want to age in place. This works well until healthcare becomes a burden on family or impractical to perform at home. That’s when Boomers will face financial challenges for which there are few answers outside of Medicaid, which is already stretched to its limits and has become a political football. So be prepared to face a government push to further grab your assets to offset costs.

It is likely that most Baby Boomers will wind up using some sort of Medicaid program in old age. Meanwhile, we can do ourselves a favor by participating in political movements endorsing favorable long-term care options.

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