“Even Critics of Safety Net Increasingly Depend on It” (NY Times, Feb. 12, 2012, pp. A1, 24) presents frightening trends that threaten the well being of every American. A myriad of benefits programs provided over $6,500 for every man, woman and child in the US in 2009, a 69% increase from 2000. And although the primary objective of these programs was to keep Americans out of poverty, the poorest Americans no longer receive the majority of government benefits.
Trends in the need and cost of these programs are sobering. Nearly 50% of Americans lived in households receiving government benefits in 2010, up from 38% in 1998 and 44% just before the recession in 2007. And spending on medical benefits is projected to rise 60% over the next 10 years. As the baby boomers age, the number of Americans covered by Medicare will increase by one-third. These increases will make spending on medical benefits higher than every other expenditure in the federal budget expect interest on the national debt – higher even than the money invested in education or defense!
And where will the money come from to cover all these national expenses? Not from the taxes we pay. For example, “a 45-year old woman who earns $43,500 in 2010 will pay taxes worth $87,000 to the federal government by the time she retires, BUT the government will spend $275,000 for her medical care before she dies. As the economists say, “There is no free lunch.”
As the boomers age, increasing numbers of them will also need long-term care, which is covered by Medicaid or personal funds, NOT Medicare. And, of course, the demand for long-term care will continue to increase – even as Medicaid funds shrink. How sad…
One way to maintain your dignity in your final years AND to minimize physical, emotional and financial stress on your family is to own long-term care insurance to cover these expenses that can average over $70,000 per year. You owe it to yourself and your family to give this option careful thought.