Sorry, No Room for Your Mom

There’s one little problem with your clients' LTC plans: LTC services providers are in decline.

By Allan Checkoway | August 10, 2018 at 11:36 AM

We, the American People, are facing a national crisis… the need and cost of financing long-term care. And nothing is being done about it!

There will be 8 million American citizens who are 85 years old in the year 2030 who will be unable to care for themselves. Regrettably, there will not be enough long-term care facilities to provide their care. Unfortunately, America’s senior population is in great danger.

We’ve all heard of the “graying” of America… the dramatic growth of the number of people over age 65. With modern medical technology’s advancements over the last few decades, eight out of 10 of us will live to their mid-60s and beyond. This senior explosion will result in the number of those age 65+ doubling in the next 50 years, while the number of Americans over age 85 triples! Unfortunately, advancing age automatically results in the escalating need for more significant serious health conditions and ongoing healthcare services.

The Class Act (Gone missing)

The federal government made an attempt to adopt legislation intended to positively impact the problem of inadequate long-term care services in the United States.

Former President Barack Obama signed into law comprehensive healthcare reform legislation that contained a program known as the CLASS Act (Community Living Assistance Services and Supports Act) which was then repealed, quietly. Many of the details regarding the CLASS Act were never defined and would have had to be developed through future Government regulation by the U.S. Department of Health and Human Services. Simply stated, my interpretation of the CLASS Act is there would have been a voluntary long-term care program under which individuals pay a monthly premium and would have been eligible for modest benefits to satisfy their long-term care needs after five years of paying premiums. While CLASS was characterized as a long-term care program, it appeared to be primarily designed as a program to provide future assistance to the working disabled.

Traditional long-term care insurance requires that applicants meet certain good-health requirements. CLASS would not have health qualification requirements as the plan would have been available on a guaranteed-issue basis. Industry experts know that any voluntary insurance program that is “guaranteed issue” (no medical underwriting) is guaranteed to appeal to individuals with significant medical problems that are guaranteed to generate enormous loss ratios. With no future plans to account for “balancing the books”, the CLASS Act could potentially have negatively impacted the federal national debt. Thankfully, the Class Act program that in my opinion, was destined to fail, was abandoned.

The Senior Age “Explosion”

Today’s baby boomers start turning 85 in 2030, when it’s projected that 8 million people over age 85 will be unable to care for themselves. Those boomers must have qualified, licensed caregivers monitoring their care. According to a recent national nursing home survey, there were 1.4 million residents’ ages 65+ in nursing homes. At the same time, many states were reporting a reduction in the number of nursing homes. If the nation’s nursing homes are today reportedly understaffed, where will we put 8 million people in 2030? There is no place for these people to go!

Home health care services that are safe and affordable are getting harder to find. Very simply, we have a growing elderly population being cared for by a diminishing number of available caregivers. Too many old to care for; too few young to provide that care. Why isn’t the national media reporting on the inevitable Long-Term Care Storm that’s looming on the horizon? Where’s the outcry?

When an earthquake, hurricane or other act of God strikes, we read about the aftermath and the disaster relief. When catastrophic illness strikes, there is no adequate “disaster relief.” There is no long-term care Coast Guard! It’s hard to imagine that there’s a rapidly growing STORM of financial and psychological devastation on the horizon… the need and the cost of long-term care . . . and nothing is being done about it! Again, where’s the outcry?

A False Assumption

In a national survey, it was identified that most Americans assume that Medicare will cover long-term care expenses. It does not. Medicare does cover professional care but most LTC expenses are custodial expenses, not covered by Medicare. In order to receive government assistance with the cost of LTC, people must qualify for Medicaid (not Medicare), the federally subsidized state low-income health program. Over two-thirds of all LTC recipients currently use Medicaid to pay for their care. Unless the current system is changed, it’s been predicted that Medicaid could collapse under the weight of 8 million baby boomers requiring long-term care services.

The tidal wave that drowns the Medicaid program will flood other budget priorities – education, defense, criminal justice, etc. The ripple effect will eventually devastate many other government programs. The enormity of the economic realities of LTC is so overwhelming to most of the baby boomer generation that the solution seems to be denial. Some of the misguided responses are; “It’ll be my turn to become a ward of the state”; “I’ll let the system take care of me for a change”. It’s an unpleasant and depressing topic that doesn’t go away… just gets worse. It’s easy to object and hard to face the thought of losing our independence. It takes an enormous amount of self-understanding and courage to admit “I’m afraid of being helpless and dependent.” However, there is just no denying that one out of two over age 65 will require some type of assisted care before they pass away.

No Place for Mom

In my home state of Massachusetts, a Boston Globe article reported on “Nursing home patients put adrift.” A Massachusetts law was passed that was designed to provide public comment on the closing or sale of nursing homes. The Globe article told a tragic story that should be a warning for everyone. A nursing home resident had been transferred from a long-term care facility to a local hospital for cancer treatments. Upon discharge from the hospital, she was told she couldn’t return to her nursing home, as the facility would be closing its doors. Fortunately, the family found a bed for her in another facility, but much farther away. Regrettably, the patient passed away two months later. Can we assume the change in surroundings and caregivers took a horrible toll, possibly a women’s life?

How would you have dealt with this issue if this woman was your mother? With all the problems our elected officials are facing these days, we hear no mention of the need and cost of long-term care for our nation’s elders. We’re not hearing about a growing shortage of nursing homes which gets worse every day. We’re not reading there will be 8 million seniors with no place to spend their final years. Lastly, where is the outcry?

Allan Checkoway, RHU, is the principal at Disability Services Group, a Needham, Massachusetts-based benefits advisory firm, and the author of “I’m Disabled . . . Now What?” — a guide to the resources available for people whose lives have been impacted by changes in their overall health.

https://www.thinkadvisor.com/2018/08/10/sorry-no-room-for-your-mom/