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.