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