66% of residents in an assisted living facility in 2009 reported being the primary source of payment for the costs of housing and care.  The impact of the economic recession has hit seniors and their families hard with an almost 60% drop in the number of families able to contribute to a loved ones care.  The trend of more seniors being solely responsible for the costs of housing and care will only be made worse as the combination of a slow economic recovery and additional cuts to programs such as Medicare and Medicaid are being contemplated as part of President Obama’s health reform plans. 

Over the coming years these economic and political realities will be exacerbated by the baby boomers reaching retirement age and then their “senior living” years (shifting to use of home healthcare, assisted living and skilled nursing home care).  Cuts to programs such as Medicare and Medicaid may be shortsighted. During a recent interview with healthcare policy expert Gail Wilensky on PBS’ News Hour (Aug. 10), her insight into the impact of these cuts was very specific: 

GAIL WILENSKY: The notion that you can cut $500 billion to $600 billion dollars out of the Medicare and Medicaid program and think that you don't risk affecting access for groups of seniors is simply incorrect. That is a whole different story. What most of the ways to get money quickly, which is what you want if you want to use that money to expand insurance coverage for people don't have it, are sure ways that Congress will score as being a real saving, and that means whacking reimbursement. They're going to lower reimbursements for a nursing home. They're going to lower reimbursements...

JUDY WOODRUFF: For nursing homes?

GAIL WILENSKY: ... for nursing homes, for home care. They're going to reduce the amount hospitals who have high re-admissions for certain illnesses have. Now, do you want to go after some of these in reforming the delivery system? You do in careful and slow ways, but just whacking reimbursement, which is the only way to get quick savings upfront, is a whole different matter.

There is no doubt that our nation’s healthcare system needs reform, but before cutting real dollars to provide care to our nation’s most vulnerable population, areas to concentrate on first are administrative waste, unnecessary medical testing, frivolous law suits, and excessive drug and medical equipment costs.  Regardless of the outcome of this latest attempt to reform healthcare, seniors and their families must prepare themselves to shoulder more and more of the burden of the costs for senior housing and care.  Private funding sources are going to continue to become the rule and not the exception as time moves along. 

If you want to add your voice to the healthcare reform debate, click here to learn how on the American Health Care Association (AHCA) website.

NYT: Seniors living in retirement communities react to the President's health reform proposal

The federal government plans to cut $16 billion of funding out of Medicare for nursing home care over the next ten years.  In addition, the U.S. House of Representatives will vote on cutting $45 billion out of Medicare funding as part of their proposed health care “reform” legislation.  The combined impact of these cuts with the shrinking dollars in every state to fund Medicaid budgets is the greatest threat to quality of care for our nation’s seniors in history. 

Seniors rely on Medicare to fund short term rehabilitation services provided by nursing homes, and many rely on Medicaid to fund long term residency in a nursing home.  The amount of money these programs pay barley cover the true costs of housing and care, and nursing homes are forced to operate on dangerously thin margins.  Further cuts to their budgets will have an immediate and negative impact on the quality of care that it is possible to provide.  Nursing homes and long term care services are often large employers in local communities, and these cuts will also have a negative economic impact for towns across the United States. 

Studies have shown that many people are unaware of the differences between Medicare and Medicaid and how long term care in a nursing home or assisted living environment is paid for.  As government budgets continue to be stretched thin by shrinking tax dollars and a growing senior population, the burden to pay for the costs of housing and care for seniors will continue to be pushed back on the individual.  The unfortunate truth is that as more and more baby boomers age and require long term care, their will be fewer dollars available to pay for these rising costs.  Every family should take the time to understand how the system works, and put their own plan in place for how they will pay for themselves, or for loved ones when the time comes.

To read more about budget cuts, click here.

UPDATE: Medicare cuts could cost 1,960 jobs in Florida