The President’s budget proposal calls for a reduction in Medicare and Medicaid spending over the next ten years of $295 billion.  The President’s goal is for the savings to help pay for the cost of coming health care reform legislation.  Among the targeted areas for cuts are spending on home health care and freezing reimbursement rates for skilled nursing homes.   

Readers of this Blog know that we have been talking about the reality of these cuts for a long time.  There is no escaping the demographic and economic realities that will force drastic measures to preserve some semblance of these critical programs for our nation’s senior population.  Medicare and Medicaid represent a large percentage of the national budget and that number will escalate to unsustainable levels if left unchecked over the next ten and twenty years.

In the President’s stimulus package he increased Medicaid spending as one of the larger spending items of the bill.  But that increase should not be interpreted as a sign of things to come.  That was a temporary emergency measure, and as the economy stabilizes the cuts will start to emerge.  Seniors and their families will need to take this reality into account as they plan for the future. 

The cost of care is on the rise and the burden being placed on the individual will grow.  These cuts are just the tip of the ice berg compared to what we will see in the years ahead.

 To learn more about the proposed cuts to Medicare and Medicaid, click here.

In a recent commentary for CNN Politics, Bob Greene wrote a very compelling piece about the economic injustice currently being done to our nation’s senior citizens.  In it he observes that the mantra being repeated in the media to keep everyone from jumping off a cliff is to “wait out the storm”.  We are reminded of the conventional wisdom that economic busts and booms are cyclical, but that in the long term the stock market will steadily increase in value and after a few years people will recover their losses. 

But as readers of this blog know, we have been reminding people that our seniors don’t have that time to wait.  Many are in situations where they need the money from their investments or the sale of their home right now to pay for things such as senior housing and care.  If that money has evaporated ($11 trillion of wealth in America has disappeared in the last year alone!) what will people do if it is no longer safe or possible for them to live without assistance?  The people who built this country, fought its wars, and made our prosperity possible are now the ones left holding the bag. 

Mr. Greene is absolutely correct when he says it is unfair to force this generation to sacrifice again-- just when they should be able to enjoy a peaceful retirement in safe and nurturing surroundings.  Fortunately, there are options that our nation’s seniors and their family can turn too for financial security.  There are Funding Solutions that can be accessed to help ease the hardships of this economic calamity.  We have been writing about this situation and the potential solutions for a long time.  Kiplinger’s Retirement Report (March, 2009) issued an excellent resource analyzing this crisis situation and in it, they discuss Funding Solutions from companies such as Life Care Funding Group (see page 4).

 To read the commentary by Bob Greene, “We owe oldest Americans an apology”, click here.

That recent headline by MSN Money.com sure is an attention grabber.  But the cold hard facts of this economic crisis and its impact on seniors should be grabbing everyone’s attention.  The equity in the vast majority of people’s homes is their single greatest source of net worth.  The unprecedented slide in the real estate market is a huge hit for just about everyone.  Recent statistics show that in less than a year the total amount of home equity in American’s homes that has vanished rose from $500 billion in 2008 to $3 trillion by the beginning of this year.

Families are trying to find ways to cope with this catastrophe.  The number of seniors living with their adult children is sharply on the rise with a 62% increase from 2000 to 2007.  Many of these seniors are experiencing declining health and would be better served to live in an assisted living environment, but they can no longer afford the costs.  Assisted Living companies all across the country are reporting declines in occupancy and are now reacting to this crisis by providing additional resources and incentives to help people make the move.

Some companies are offering incentives such as paying for moving expenses, waiving the first month rent or offering shared living and shared expenses with another resident.  Funding programs such as life insurance settlements, bridge loans and VA benefits are being offered by more assisted living properties to help people overcome the loss of equity in their home or investment portfolios.  It is in times of crisis when people must do all they can to adapt and inform themselves of what options are available to help them raise the money they will need.

To read the MSN Money article “Seniors Crushed by Housing Crisis”, click here.