The U.S. only has about five years left to solve its looming long-term care crisis before baby boomers start retiring en masse and stop saving, according to Dr. Bruce Chernof, president and CEO of the SCAN Foundation and recent appointee to the Long-Term Care Commission.
As rising costs for long-term care threaten to deplete the savings of many Americans, seniors risk not being able to afford their healthcare costs in retirement, and proactive steps should be taken now, he said in an interview with PBS.
About 70% of people will need some form of long-term care when they are over the age of 65. Because health expenses significantly impact the retirement savings of many older adults, if nothing is done to address the nation’s long-term care crisis, Medicare will bear an even greater burden as it accounts for an increasingly older population in the years to come.
The average nursing home today costs about $81,000 a year. And part-time help at home and in the community is in the range of $21-$22,000 a year. So it’s not insignificant.
People need to plan, and we think planning needs to come in two forms. First, we all need to be aware that we will likely have needs as we age, and we should be talking to our family about them. We should all want to live with independence, dignity and choice. We should be able to talk about those things so that our friends and family know how to help us think and plan.
The other piece, which is what you’re alluding to, is that we need to plan financially. And sadly, there really aren’t that many tools out there right now for American families.
There’s a very large misperception that Medicare pays for this. But these are not services provided by Medicare in the long-term, and families are left with few other choices.
For some folks, purchasing long-term care insurance is an option, but it is expensive. So for many people, they have to rely on other resources or savings. That’s why we think new tools are really necessary for American families.
The time for reform is now, says Chernof, who suggests that looking at long-term care issue in America cannot be considered just another “Chicken Little debate.”