Two recent reports add more evidence to the alarming trend of financial pressure being pushed back onto seniors and their families as they reach the age that the costs of long term care play a central role in their lives.  In addition to Medicaid cuts in the states and cuts to Medicare being proposed as part of healthcare reform, more money will continue coming out of seniors’ pockets. 

The annual MetLife Mature Markets Institute study tracking the costs of long term care in assisted living, nursing homes and home healthcare was recently released showing significant increases in costs over the last year: 

-         Nursing Home costs rose 3.3%

-         Assisted Living costs rose 3.3%

-         Home Healthcare costs rose 5%

-         Adult Day care costs rose 4.7% 

The increasing costs of long term care can be attributed to the most basic economic principal there is: supply and demand.  The economic crisis has slowed the construction and expansion of facility based care.  Also, more people requiring long term care are having a difficult time selling their homes.  As the population of seniors demanding long term care services of every type increases, the supply of options and dollars is decreasing—driving up the costs. 

In another alarming report, the costs of Medicare premiums will rise 15% next year. This will push the monthly Medicare premium above $100 for the first time in history.  The final outcome of this increase, or measures to offset the increase, is being debated in Congress as part of healthcare reform.  Regardless of the outcome, this will now become a yearly struggle as the population going onto Medicare is exploding-- and just when the country is least prepared financially to accommodate the demand. 

Supply and demand will become a recurring theme over the years as the growing population of seniors needing to pay for long term care confronts the harsh reality of both a shrinking supply of dollars and ability to deliver housing and care. 

To read more about the MetLife Mature Markets study, click here. 

To read more about the increase in Medicare premiums, click here.

Another sign of things to come for seniors in the 21^st Century: for the first time since the darkest days of the economic crisis of the 1970’s, seniors will not see a cost of living increase in their Social Security checks.  Combine this new development with proposed cuts to Medicare and Medicaid and the trend for seniors is becoming clearer every day. 

The realities of a global economic recession intersecting with explosive growth in the senior populations will create increasing pressures for the United States.  More people needing help (money), with less resources to go around (money), equals hard choices about how to help those who need it most (money).  Increasing emphasis on the individual to shoulder more of the costs of their senior years will grow quickly.  Moves to cut COLA’s, raise the minimum age for Medicare and cut Medicaid funding in the states will become more common occurrences. 

The Baby Boom generation is still in the early stages of moving into their retirement years and the amount of money required to support these programs is already overwhelming. As economic and demographic trends over the coming years continues to challenge the governments ability to keep pace, seniors and their families must do all they can to prepare themselves financially for the costs of retirement and the even greater costs of long term healthcare. 

To read more about the COLA freeze for Social Security, click here.

Senator Snowe (R) of Maine has emerged as one of the most important figures in the healthcare reform debate that has been transpiring in Washington, DC and around the country for months.  She is one of the most respected and influential Senators serving today because of her moderate approach to issues and her thoughful efforts towards bi-partisan coalition building. In recent correspondance with Chris Orestis, Senator Snowe was kind enough to share her thoughts about healthcare reform with Life Care Funding Group. 

We are pleased to share this letter with the readers of the Life Care Funding BLOG so you can have the opportunity to read for yourself the approach being taken on this critical issue by one of its most pivotal players. 

 To read the letter from Senator Snow to Chris Orestis, click below.

Senator Snowe correspondance 9-09.pdf (904.92 kb)

UPDATE 10/13:  Senate Finance Committee to vote today on Senate version of healthcare reform bill-- Sen. Snowe is the key swing vote everyone is watching.  To read more, click here

LATE BREAKING UPDATE 10/13: Senate Finance Committee passes healthcare reform bill-- Sen. Snowe is the only Republican to vote in favor of the legislation.  To read more, click here