When people in power talk about the costs of long term care, it’s often overwhelming and cold. They use statistics you can’t really understand. All you want to know is how to keep long term care from bankrupting you. A Bipartisan Policy Center (BPC) report may have some solutions.
How to Keep Long Term Care From Bankrupting You
As much as statistics make everything less human, they are good to show how needed this talk is. According to the U.S. Department of Health and Human Services, 52% of people turning 65 will need long term care. That’s a lot of people.
The Cost of Long Term Care
If the government, insurance companies, and employers all adopt proposals in the BPC report, long term care could be a breeze. The report, Financing Long-Term Services and Supports: Seeking Bipartisan Solutions in Politically Challenging Times, lays out how to make paying for long term care easier on the average family.
According to the report, over 12 million people need long term care support. The need will rise as Baby Boomers get older. The cost for long term care is $138,000 for men and $182,000 for women. How many people can actually afford that?
A nursing community costs around $91,300 a year. A home health aide is $45,800 a year. Both are much higher than what the average family can afford.
Plus, Medicare usually doesn’t cover long term care expenses to the shock of many people. Most people believe that the program will help them cover these costs. To qualify for Medicaid, you need to lose almost all of your money.
What the BPC Thinks Will Help
The Bipartisan Policy Center has a few ideas on how to ease the pain of Americans when it comes to these costs.
1. Give employers incentives to give affordable “retirement long-term care insurance” as an employee benefit. They can also auto-enroll employees age 45 and older. BPC thinks that the annual premiums for someone in that age bracket might be $600 instead of $2,400.
2. Let employees withdraw from 401(k) and similar retirement accounts without owing federal tax penalties if they use the money to buy long term care insurance policies through their employers.
3. Let Medicare Advantage plans, and other Medicare provider organizations offer up to 14 days a year of respite care coverage to high need, high-cost Medicare beneficiaries who have 3 or more chronic conditions, functional or cognitive impairment, and are part of a person and family-centered care plan. Today, Medicare only offers respite care to beneficiaries in hospice who are expected to die within 6 months.
4. Let Medigap and Medicare Advantage plans sell limited, affordable long term care coverage as an optional, voluntary benefit or a separate insurance policy financed through premiums paid by beneficiaries.
5. Allow state and federal health insurance marketplaces sell lower cost, limited benefit, retirement long term care insurance policies.
If these proposals are put in place, the cost of care would be cut in half.
Read more here.