Even as many baby boomers devote countless hours to caring for their elderly parents, the problem of how to pay for their own long-term care needs weighs heavily on their minds. Yet, the question of how to help Americans save for future care has not been adequately addressed by either presidential candidate in the 2016 election.
It's a question that, given the impending flood of baby boomer retirees, is in desperate need of an answer. According to the Centers for Medicare and Medicaid Services (CMS), about 12 million Americans will need some form of long-term care by the year 2020.
“This is one of the looming issues that people don't want to talk about, but we're going to have to talk about it soon,” says Brian Feldman, former regional director for the Health Leadership Council and current senior partner at Allison & Partners.
The Cost of Caregiver Insight
People taking care of older family members have the unique opportunity to learn about long-term care possibilities and gain insight into the challenges that await them as they get older. Yet, studies have shown that this increased awareness isn't compelling caregivers to take the steps necessary to plan for their own futures.
Part of the problem is that many simply don't have the cash to set aside for their own retirement and long-term care needs. The current instability of government-funded assistance programs and the financial difficulties of taking care of an elderly loved one compound this problem further.
For 41-year-old Saideh Browne, raising two children and taking care of her 91-year-old grandmother has decimated her savings. “People like me who care for younger people and seniors are not even economically stable anymore. What hope do we have for retirement?” she asks.
A Failed Attempt at CLASS
President Obama's health care reform bill, the Affordable Care Act, attempted to remedy long-term care concerns through the creation of the CLASS Act: a provision meant to create a government-funded long-term care insurance program.
However, the Department of Health and Human Services (HHS) suspended the CLASS Act initiative indefinitely.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance, doesn't see the program being carried out as it is currently written. “You cannot offer long-term care insurance without tax support or health qualifications for applicants and at the same time make it affordable,” he says.
Extra revenue in the form of taxes isn't likely to appear anytime soon to fund programs like the one outlined in the CLASS Act. Both Obama and Mitt Romney are adamant about cutting taxes for at least a portion of the population.
Obama has stated that he does want to raise taxes for Americans in higher income brackets, and on insurance programs with the highest premiums, but any additional money collected will likely go towards keeping floundering government entitlement programs, such as Medicare, Medicaid and Social Security, afloat.
Long-Term Care Landscape Unchanged
When it comes to footing the bill for long-term care needs, the election will not have much of an impact in terms of increasing the number of financial options available to those nearing retirement age. Aging adults will have to continue to rely on a combination of personal savings, long-term care insurance, the services of family caregivers, and Medicare and Medicaid.
The affordability (or lack thereof) of long-term care is the biggest challenge facing Americans who are at or nearing retirement age, according to Buckley Fricker, JD, CMC, a geriatric care manager and president of Buckley's For Seniors, a companion company for older adults.
Fricker estimates the yearly cost for a person who needs long-term care currently ranges from $25,000 to $125,000, depending on what level of care they need. “The very wealthy can afford these costs and the very poor can qualify for a Medicaid benefit for long-term care, but the average American is going to have a hard time paying for their care,” she says.
That's why it's vitally important for boomers to start planning for their own future needs. Long-term care insurance is one of the best choices currently available for people seeking to secure funds to pay for future care.
The main problem with this type of protection is that it can be pricey and applicants must meet certain age and health requirements. Depending on the kind of plan a person is seeking, certain pre-existing conditions (diabetes, stroke, cognitive problems) may prevent them from purchasing a policy.
Given the current political climate, Slome feels that even boomers who consider themselves to be in good health need to start exploring their options for financing long-term care. “I think that people are going to have to plan, and you can't wait,” he says, “The longer you wait, the more limited your options are.”