Washington state and California have introduced new taxpayer subsidized solutions to address the upcoming explosion in long-term care need. Fifty percent of Americans will need paid care, and the number of Americans 85 years old and older will triple within 35 years.
Medicaid and Medicare are broke. Medicaid is severely underfunded, and Medicare’s unfunded liability stands at 35 trillion! These two federal agencies pay for 70% of long-term care in America. Medicaid pays for 60% of nursing home expenses but only reimburses 40% of the cost. Those with private long-term care insurance make up the shortfall.
When on Medicaid and receiving long-term care, the majority of funding for that care comes from Social Security spend down. Yes, some of the cost of care comes from Medicare Part A, but a sizable chunk comes from spending a patient’s future Social Security income today. Keeping in mind that Medicaid and Medicare are broke, it would seem that this way of paying for care must end.
Medicaid has shifted to Home and Community Based Services (HCBS) to hopefully reduce costs associated with Long-Term care. In fact, half of all dollars spent go toward HCBS. The program has not saved money, with claims and costs continuing to rise.
The bottom line is that Government subjugates, and an open market liberates.