The very popular Medicare Advantage coverage that seniors elect as part of Medicare to cover medical and prescription drug coverage became significantly more expensive in 2010 than it was last year.  Reflecting cut backs in government funding, private insurers who offer elective Medicare Advantage coverage decided they would raise rates this year instead of reducing services. 

This is bad news especially for the 8.5 million seniors currently enrolled in these cost saving programs.  The premiums increased by more than double for some seniors that are enrolled, and many fear they can no longer afford to maintain their coverage.  These increases are another blow for President Obama’s goal for healthcare reform this year, because additional Medicare and Medicaid cuts are a major part of how the costs of reform would be paid for.

This is further evidence that pressure on the individual is increasing to shoulder more of the costs of their own healthcare and long term care. "These premium increases fit within a broader trend of increased financial pressure on the insured," said Lindsey Spindle, a vice president of Avalere Health, a data analysis firm that produced the statistical study. "We see very large premium increases and a continued upward creep in how much out-of-pocket expenses beneficiaries are expected to pay, such as copayments."The bottom line of this story is simple-- the need for private funding solutions for health care and long term care costs are going to pushed back on the individual more and more now and into the future. 

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

There are over 60,000 assisted living and nursing home properties throughout the Untied States.  More than 2,000,000 people reside in these properties, but over the last ten years the differences between assisted living and skilled nursing have become less distinct.  There are a number of contributing factors to consider: pressure on Medicare and Medicaid budgets, private pay services such as Alzheimer’s care, personal tastes of the aging Baby Boomers, and the economics of the facilities themselves.

Assisted Living facilities have increased the level of service and care provided to be more competitive, and Nursing Homes have added private pay services and higher end living arrangements to be more competitive as well.  The Baby Boomers are driving much of this evolution because they are a more affluent cohort than generations past, and their lifestyle expectations are very high.

Additionally, Medicare and Medicaid budgets are being reduced and the thresholds to qualify are being raised higher.  As more seniors enter the senior care stage of their lives, the access to public funds will become scarcer as the options for privately funded housing and care is on the rise.

For people to come even close to meeting their expectations for a high level of senior housing and care it will require a firm grasp of the various options available—and how to pay for it.

To read more about the blurring lines between Assisted Living and Skilled Nursing Home care, click here.