Millions of baby boomers in the United States are not fully aware of the importance of insuring their health. Many of them do things to protect their assets, but they fail to realize the fact that long-term care is the biggest financial risk of their lives. They also don't know exactly how to deal with the expenses of long term care they will incur in the future.
A large percentage of baby boomers may need extended care when they hit their retirement years. Yet, fewer than half of them have taken measures to prepare for it. This lack of preparation can lead to financial disasters. For one thing, the expenses needed to support baby boomers are expensive. On average, nursing home care amounts to US$74,600 per year. With nursing home stays averaging 2.4 years, the overall amount of extended care is expected to reach $8.88 trillion over the next 19 years.
At present, there are estimated 78.2 million baby boomers in the USA. These are the people who were born during the post-World War II era, from 1946 to 1964. Annually, Americans spend about US$200 billion on long term care services. 51% of this amount is paid by individual policy holders and private LTCi providers. The remaining percentage is paid by Medicaid. However, we can expect a sudden change in these percentages when the baby boomers reach their golden years. There is also a great deal of speculation about whether or not Medicaid will be able to support the increasing number of seniors needing care in the coming decades.
The baby boom generation faces various issues today. One of them is the escalating costs of living and medical expenditures. Amidst the advancements in medical technology, the expenses of health care for senior citizens continue to rise. Baby boomers who don't plan their post-retirement care costs are at risk of a financial crisis.
Many of them think that regular health insurance would be enough to address their care needs, but they are absolutely wrong in this assumption. Long term care costs will not be covered by medical insurance and social security benefits. Long term care insurance for baby boomers is the only type of policy that would cover the expenses for caregiving services and activities of daily living (ADLs). LTCi is designed to provide coverage for various services for the elderly and disabled who requires care and assistance at home, nursing institution or assisted living facility.
As a matter of fact, combined health care plans and Medicare benefits pay only about 3% of extended care expenditures. Also, an individual can only be eligible to government-funded Medicaid benefits if he or she lives below the poverty level or has low-income and limited assets. To confront such issues, the baby boom generation should plan their future care needs by getting long term care insurance for baby boomers. Understanding the costs of LTCi plans will help a baby boomer in making the right choice to ensure a quality long-term care.
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