May 13, 2019

The coming long-term care cost crisis

Hospital room with a stethoscope hanging outside

Photo: RJ Sangosti/The Denver Post via Getty Images

Long-term care is already prohibitively expensive for many seniors, and the problem is expected to explode in scope in the next couple of decades, the New York Times reports.

The big picture: The problem is especially acute for the group of seniors that have incomes too high to quality for Medicaid or subsidized housing, but too low to afford pricey long-term care.

  • In a decade, 80% of seniors that fall into the middle-income category will have less than $60,000 a year in income and assets, according to a recent study. But assisted living plus out-of-pocket medical expenses is projected to cost $62,000.
  • Depending on how long-term care is defined, between half and two-thirds of older Americans are expected to need it.

The bottom line: Medicare and Social Security funding is already in trouble, making it hard to imagine where the money for any additional long-term care benefits would come from. Smaller solutions are easier to picture.

  • Regardless of whether the U.S. budget has room for it or not, the problem of how to pay for seniors' care is barreling towards us, and it's only going to get worse.

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