Surveys have found that the economic crisis is discouraging or outright scaring people away from saving for their future needs.  Many are looking at the daily headlines and are afraid to put money away and watch it shrink or disappear.  Others can not afford to save as they try to keep up with the costs of daily living. Compounding the decline in our nation’s already anemic 1% saving rate is the rise in unemployment and the loss of investment income and home equity. 

This trend will have a harsh impact on seniors as they begin to enter the “Senior Living” stage of their lives and need to move into some form of assisted living. Most people do not understand the costs associated with the kinds of housing and care they expect to receive in the future.  Many do not know the differences between Medicaid, Medicare, and Social Security.  Most people do not have long term care insurance, and for those that do they have seen significant disruptions and rate increases with their policies. It is important that people not bury their heads in the sand and wait for everything to return to “normal”.  

Now is the time to take action and seek information about “Senior Living” and the various financial options.  It is also important to have a realistic understanding of the costs involved and where the money is coming from.  It would be a mistake to assume the government is going to take care of everything—and then find out too late that it doesn’t work like that. There are very specific requirements to qualify for Medicare and Medicaid and limitations to what those programs will cover. Also, these entitlement programs are not a free ride and there are expenses associated with both.  

More and more emphasis is being placed back on the individual to shoulder the burden of paying for senior housing and long term care.  There are many “Funding Solution” programs for seniors and now is the time to be researching options and planning for the future—because the future always seem to come when you least expect it and at the most inconvenient times. 

To read more about the decline in savings and financial confusion, click here.

In reaction to the deepening economic crisis, “senior living” companies that provide independent living, assisted living, continuing care retirement communities and skilled nursing care have begun actively offering “Funding Solutions” programs to seniors and their families.  Deep losses in the value of homes and investment portfolios, as well as the decline of long term care insurance companies, have had a very painful impact on people preparing to enter the stage of life where living at home alone is no longer a viable option.  Making this move is difficult both emotionally and financially—and the difficulty has been made much greater over the last year.

Leading companies such as Emeritus Senior Living, 5 Star Quality Care, EPOCH Senior Living, Belmont, Good Neighbor Care, and Legend Senior Living among many others (click here for a complete list of participating companies) have begun introducing comprehensive “Funding Solution” programs to give seniors and their families more choices and resources for financial assistance.  What was once an area largely left up to the individual to figure out on their own, has now become a critical area for support and action by senior living companies.  The range of financial services include: life insurance settlements, bridge loans, VA benefits, real estate programs, and other innovative ways to help people bridge possible financial gaps preventing them from accessing the housing and care that they most need.

Industry trade groups such as the American Health Care Association (AHCA), the Assisted Living Federation of America (ALFA), and the American Senior Housing Association (ASHA) have all been bringing attention to the importance of “Funding Solutions” for the consumer through various forums to communicate with and educate the senior living companies that are their members.  The media has also been discussing this phenomenon over the last year in periodicals such as the Wall Street Journal, the New York Times, Eldercare News, Senior Care Investor and countless other local media outlets.

With the economy continuing its downward climb for possibly years to come, it is important to see the kind of action being taken by the industry charged with caring for our nation’s elderly to put information and financial tools into the hands of the people that need it most.

Penn Treaty American Insurance Company has failed, and now Pennsylvania insurance regulators are contemplating what to do with the defunct company.  The Pennsylvania department was forced to take over a large block of Conseco polices only a few weeks ago, and now they will assume responsibility for all existing policies that were sold by Penn Treaty American and its subsidiary, American Network Insurance Company.  

Penn Treaty American fell victim to the same situation that has plagued so many other long term care insurers—in the quest for market share and growth of sales, their policies were priced too low and the company could not support the policies any longer.  The Pennsylvania Insurance Department has done the right thing to step in and take over these policies and protect the consumer, but this will only further shake the faith of consumers in the safety of long term care insurance.

The timing of these events could not be worse.  People are becoming more and more responsible for financing their own long term housing and care.  Now, people will need to look even harder for reliable mechanisms to finance their needs, and until the long term care industry can clean up this mess, many people will be looking elsewhere.  Fortunately, there are other funding solutions for senior living, and people are becoming more aware of these options every day.

To read more about the collapse of Penn Treaty American, click here.

“This is not the time for business as usual,” AARP CEO Bill Novelli said at a press briefing. “It is time to demonstrate bold leadership, to take our agenda to the people and our nation’s leaders, to demand change and to work hard to bring about that change.”

And with that, the AARP, representing more than 40 million Americans over the age of fifty, put the incoming Obama administration and the next Congress on notice that they would be playing a very active role in any discussions about healthcare reform and economic recovery efforts.  They correctly identified the fact that long term care is always one of the first areas to be ignored or gouged when it comes to government budgets.  They also called for $50 billion in aid to Medicaid programs—just at a time when state and federal budgets had made it clear that Medicaid budgets would be in jeopardy due to the economy.

This is important good news for seniors and families that are being hit hard right now by the effects of the economic crunch.  Economic indicators continue to get worse as reports issued by the Federal Reserve, the auto industry, the housing industry and the Labor Department show continued declines at unprecedented levels. Seniors will need help securing and paying for appropriate levels of housing and long term care.  Help from the government and private sector innovations to provide funding solutions for senior living are going to become critical—especially over the next two and three years.

To read more about the AARP’s legislative priorities, click here.