Some big numbers and what they mean to Long Term Care

A recent report from the Social Security and Medicare Trust Fund indicates Social Security is under funded by $16 trillion and Medicare is $85 trillion in the hole. Kind of hard to think about numbers like that isn’t it?

Steve Moses of the Center for Long-Term Care Reform, Inc., an organization I support, summarized what this under funding really means to how most Long Term Care is currently paid in a recent eMail note. He stated the deficit:
“Will sink Medicaid LTC. That means most Americans will have to pay for their own long-term care in the future. Medicaid will no longer remain the principal LTC payor for the middle class and affluent.”

He expanded on this and indicated today:
“People on Medicaid have to contribute their income toward their cost of care. Social Security is a big part of the income of old people on Medicaid. So, when Social Security has to cut back, Medicaid LTC will lose a major source of funding.

Medicare doesn’t pay for LTC but it does fund 17 percent of nursing home expenditures and 38 percent of home health expenditures. And it pays generously. That’s what keeps nursing homes and home health agencies afloat financially despite dismally inadequate Medicaid reimbursements. So, when Medicare has to cut back, Medicaid LTC will be devastated.”

Medicaid for many years has been paying not only all medical related costs for the indigent but also long term care costs for many others. Thus, when Social Security and Medicare reduce their funding, which they will have to, what will happen? Steve’s note answered this and stated:
“Medicaid LTC will collapse. That means most American’s, all but the poorest of the poor, will have to pay for their own LTC in the future.

In other words, the idea that people must buy LTC insurance to avoid catastrophic LTC spend down which was only a myth up to now will become the reality of the future.”

More insights from Steve can be found on the Centers web site.

http://www.centerltc.com/