This week, the Elder Economic Security Initiative™ team met with our National Advisory Board to update them on the project and discuss goals for the New Year. Long-term care (LTC) and the importance of preparing future generations for the high costs of aging in place was a major component of the conversation, and, it turns out, in conversations throughout the country. Newsday recently featured the article “We can Avoid an Eldercare Crisis” which encourages Baby Boomers in particular to find ways to save for long-term care now before it’s too late. It also explains how to prevent future elders from depending on Medicaid, which provides benefits to low-income elders unable to pay for care. Medicaid eligibility requirements require those elders living on the edge to spend down their assets in order to qualify.
WOW’s Elder Economic Security Standard™ Index (Elder Index) shows just how important it is to plan ahead. Depending on the level of care, LTC costs can double or even triple what it costs for an elder to meet her basic expenses. For example, in Bronx County, NY, an elder woman renter in good health needs $23, 328 a year to cover basic living expenses. This cost changes dramatically if she is in poor health and needs 16 hours a week of LTC assistance (a medium level of care); her annual expenses would nearly double to over $43,500.
Hence the need for a program to help Americans save for these high costs of care and the reasoning behind the Community Living Assistance Services and Supports (CLASS) Act – signed into law under health care reform. This program will allow workers to pay in to a government supported system and after five years of investment receive a daily cash benefit to supplement long-term care costs. This program will not only benefit elders but people of all ages who need assistance due to physical disabilities. Find out more about the program’s benefits at the New Old Age blog.
The reality is that long-term care is necessary for millions of elders in retirement and though many might not want to think about getting older, we must not only think but act. Through advanced planning and good decision making future retirees can save for their long-term care needs.
Communications & Program Coordinator
Elder Economic Security Initiative