| The crisis in long term care is a | | | | people who lack the ability to take care |
| disaster 61 years in the making. It | | | | of themselves for an extended period. If |
| began in 1946, when the first post-war | | | | that percentage holds in the coming |
| babies were born-in record numbers. It | | | | years, then 49.6 million of the boomers |
| continued for 18 more years, as the | | | | will require long term at some point. |
| "baby boom" continued. Things took a | | | | The cost of that care will be |
| turn for the worse in 1964, when | | | | staggering. Right now, the average cost |
| birthrates began to fall. The impact of | | | | of a private room in a nursing home is |
| the baby boom has been enormous. It has | | | | $74,600 a year and the average stay is |
| affected everything from school | | | | 2.4 years. At those rates, the total |
| enrollment in the '50s and '60s to the | | | | cost of long term care for the baby boom |
| economy of the '80s, '90s, and '00s. At | | | | generation would be $8.88 trillion. That |
| the peak of their earning power, the | | | | averages out to $467 billion a year for |
| baby boomers have generated record tax | | | | each of the baby boom generation's 19 |
| receipts and created a surplus in Social | | | | years. |
| Security. That is about to change. | | | | Who is going to pick up the tab? Nearly |
| With the baby boomers in the workforce, | | | | 60 percent of baby boomers are under the |
| there are now 3.3 workers for each | | | | impression that Medicare pays for long |
| Social Security beneficiary. As the | | | | term care. They are mistaken. Medicare |
| boomers move into retirement, however, | | | | pays for short rehabilitation periods, |
| that figure will fall. By 2031, there | | | | but not for long term care. Today 51 |
| will be only 2.1 workers for each Social | | | | percent of long term care is paid for by |
| Security beneficiary. The Social | | | | individuals and long term care |
| Security trust funds are projected to | | | | insurance; 49 percent is paid by |
| have surpluses each year until 2016. | | | | Medicaid, the federal program covering |
| Trust fund reserves will grow to about | | | | low-income people. |
| $4,459 billion. In 2017, however, with | | | | Without reforms, the baby boom will put |
| about half the boomers at retirement | | | | a tremendous strain on Medicaid. As a |
| age, tax revenues flowing into the trust | | | | result, Congress is tightening Medicaid |
| funds will be less than total | | | | eligibility requirements. It is also |
| expenditures. Interest on the reserves | | | | giving tax breaks to individuals who buy |
| and the assets will make up the | | | | long term care insurance. Long term care |
| shortfall-at least for a while. In 2041, | | | | insurance is a special policy funded by |
| when the first boomers are 95 and the | | | | monthly premiums that pays for long term |
| last are 77, the reserves will be | | | | care, if it is ever needed. The AAHSA |
| depleted. Incoming funds will cover only | | | | estimates that the average long term |
| 75 percent of the scheduled benefits and | | | | care insurance policy purchased by a |
| administrative costs. | | | | 65-year-old and held until death pays |
| The boomers will have a similar impact | | | | out 82 cents for every dollar spent in |
| on long term care. At least 72 million | | | | premiums. |
| baby boomers will live to be 65 and | | | | As with all insurance, long term care |
| older, according to the U.S. Census | | | | costs less for younger, healthier |
| Bureau. According to the American | | | | people. The average annual long term |
| Association of Homes and Services for | | | | care premium for individuals under 65 is |
| the Aging (AAHSA), a nonprofit | | | | $1,337. The average premium for |
| organization that specializes in elder | | | | individuals over 65 is $2,862. The |
| care, 69 percent Americans who live to | | | | sooner the boomers sign up for long term |
| be 65 or older require long term | | | | care insurance, the better off they are |
| care-the supportive services needed by | | | | likely to be. |