Thursday, September 20th, 2012
We’ve been looking at the costs of long-term care for senior citizens. Bills for nursing homes, assisted living facilities, and in-home assistance usually are not covered by Medicare. For this reason, American seniors are spending tens of thousands and sometimes hundreds of thousands of dollars in their last five years of life.
The last post focused on some proposals for public long-term care insurance. However, there are no pending bills before Congress for such insurance, and even if such a bill were passed tomorrow it would take awhile before the insurance would start paying benefits.
If you are already retired or nearing retirement age, it’s safe to assume you could find yourself saddled with huge medical bills eventually. There are a host of severe diseases that affect seniors more than anyone else. Mesothelioma, for example, is most often diagnosed in people over 55 years of age.
Other than getting yourself a private long-term insurance policy — which is highly recommended — what can you do? Many seniors find themselves falling back on Medicaid after they’ve drained their own assets paying for long-term care. It’s not a great system, but at least seniors aren’t losing their nursing home beds because they can’t pay their bills.
However, the fight in Washington is not over finding a better way to help seniors so that they don’t have to go broke before falling back on Medicaid. It’s over whether there will be a Medicaid to fall back on.
As explained in a recent Bloomberg News analysis, the presidential candidates are very far apart on the issue of Medicaid. Very simply, President Obama wants to preserve Medicaid as an entitlement program, which means it will pay all acceptable expenses for people who qualify for the program. The Affordable Care Act, or “Obamacare,” actually expands Medicaid a bit, raising the eligibility requirements so that more people are eligible. However, right now Republican governors in some states are refusing to expand their Medicaid programs.
Republican presidential nominee Mitt Romney wants to turn Medicaid into a block grant program. Federal guidelines and requirements would be eliminated, and instead the federal government would give fixed amounts of money to states as block grants. The states would then create their own programs providing health care for the poor.
However, the amounts of money granted to the states would increase only at 1 percent more than inflation, and actual health care costs have been growing much faster than that. Bloomberg estimates that in ten years the grants would be $1.26 trillion short of what would be needed to sustain current benefits.
This would appear to save the government a lot of money, but no consideration has been given to what’s going to happen to the millions of seniors whose nursing home bills are paid by Medicaid. The day may come when the only inheritance most of us leave are a pile of unpaid medical bills.
“This policy disagreement illustrates the great divide between Obama and Romney over government aid,” the Bloomberg analysis says. “Obama believes in setting a floor to support Americans in need; Romney wants a ceiling on the government’s responsibility.”
A public long-term care insurance program would both protect seniors and be less of a drain on the federal budget. This is a far more sensible solution than Medicaid block grants.