Medicaid is a social welfare program that was originally intended to provide access to health care to uninsured Americans who are unable to afford it on their own. However, since Medicare does not cover the costs of residing in an assisted-living facility or nursing home, many senior citizens implement strategies that enable them to qualify for Medicaid, which does in fact pick up long-term care costs for eligible enrollees in the program.
There is a lot of talk on Capitol Hill right now about reducing the federal deficit, and entitlement programs that assist senior citizens, including Medicaid, eat up a significant portion of the federal budget. The combination of Social Security, Medicare, and Medicaid payouts comprises over 35% of federal expenditures. Over the years it has always been politically taboo to even hint at any reductions in these programs, but at the present time the makeup of Congress being what it is even these “sacred cows” have become part of the discussions.
What makes the situation all the more interesting is the fact that the nation’s population is aging at an extremely rapid pace so rather than there being less need there’s going to be significantly more need as the years pass. As we have stated in this space previously the “oldest old,” which is a term that is used to describe people who are at least 85 years of age, are the fastest growing age group in the United States at present.
At any given time one in four individuals who have reached this age are residing in a nursing home. In addition, 40% of people who reach the age of 65 will spend some time in an assisted living facility and there will be about 10,000 people reaching this age every day for the next 20 years. So it is very logical to assume that more and more people will be applying for Medicaid as time goes on.
Balancing the budget sounds like a great idea, but frankly, it would be very difficult to achieve without somehow reducing entitlements to seniors or significantly raising taxes. So if you are planning for your retirement the current budget talks taking place in Washington are very relevant to you.
- Important Subjects to Discuss with Your Estate Planning Attorney - January 23, 2023
- Planning for the Possibility of Dementia - January 20, 2023
- How to Prepare for Retirement - January 17, 2023