The Long Term Health Care Problem
The problem, in a nutshell, is this:
With advances in medicine and technology, Americans are living longer than ever before. Unfortunately, because of that, the chance of you needing long term health care at some point in your life is also greater than ever before.
More than half of the US population will require long term care at some point in their lives (Americans for Long-Term Care Security, www.ltcweb.org, August 2000.) For couples 65 and over, there is a 75% likelihood that one partner will need long term care (The Wall Street Journal, June 2000.)
There is a 68% probability that people age 65 and over will become disabled in at least two activities of daily living or of being cognitively impaired (AARP, Beyond 50: A Report to the Nation on Independent Living and Disability, 2003, www.research.aarp.org.)
Here's the even bigger problem: The recession of the last two years has slashed a lot of seniors' retirement account balances. Equity in homes has stagnated as the housing market crashed. Even if you had money put away for future health care needs, it may be short now.
Medicare and Medicaid are not the answer
And as you're well aware, Social Security, Medicare and Medicaid are in serious financial trouble. They were never intended to pay for long term care, but they may not be there for anything else either. The government never has been, and never will be, the solution.
What are the costs of long term health care? Well, the 2006 average daily rate for a semi-private room in a nursing home was $183 ($66,795 annually), a 7.7% increase from the 2004 daily rate of $169 (MetLife Market Survey of Nursing Home and Home Care Costs, 2006, www.MetLife.com.) Home health care and assisted living costs aren't quite as expensive, but costs continue to rise, far outpacing inflation.
You've worked hard your whole life to build up a nest egg and have a comfortable retirement. The stock market and housing markets have already taken their toll. Wouldn't it be nice to have peace of mind that
no matter what, your future is completely secure?
That peace of mind is a lot simpler, and a lot less expensive, than you might think...