1 in 7 of us will spend $250,000…

The published the results of a study in 2015 looking at the risks and financing of long term care services for older Americans.

One of the more shocking things they stated in a recent government report (US Dept of Health and Human Services) was that data indicates that 1 out of every 7 seniors will spend $250,000 (or more) for the costs on long term care. The bulk of this expense now is being born by Medicaid – the welfare program. Please note: to qualify for this program you must first burn thru all of your own financial resources. So don’t think of this as an alternative to using your own money! The very reason Medicaid pays so much of the cost is because so many people don’t plan properly for this risk and end up poverty stricken because of it.

According to the report mentioned above, The cost of care for seniors is roughly 1.3% of the gross domestic product. Estimates have it doubling to 3% over the next 20 years. Incoming President Trump and his team have stated they want to cut Federal payments to Medicaid and Medicare for this very reason *more info. Now we have a truly grim prediction of what Medicaid-base long term care will look like: less money spent on care for poverty stricken seniors even as there is growing demand for government-paid services.

This should raise serious alarms for those in the Baby Boom generation. For most couples, a $250,000 bill for care would bankrupt them and leave the well spouse in a financial pickle. So the trick is this: DON’T GET CAUGHT WITHOUT A PLAN FOR PAYING FOR CARE. Those that have money to pay will undoubtedly get higher quality care than those who end up at the tender mercies of Medicaid down the years.

If you are between the ages of 45 and 70, you should be looking into long term care coverage. The current average purchase age according to AALTCI (The American Association of Long Term Care Insurance) is 53. Yes – 53.

When I say that, folks often say with shock in their voice, “But I am not anywhere close to needing that kind of care!”

My response? “Good! Because if you wait until you are close to need you won’t be able to health qualify. You will be denied and then all your choices are taken away.”

You really have two choices:

  1. Denial: continue to live in denial and hope you are one of the few, lucky ones who don’t have extended care at the end of life…or
  2. Plan while you can: get something in place to help you weather this cost…and keep you out of Medicaid!

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