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States struggle to plug holes in senior health care as Boomers retire

Anjalee Khemlani
Senior Reporter

The cost of caring for retiring Baby Boomers has been a growing concern for the health care industry, which is weighing various options to attack the looming crisis.

Providers have been looking for ways to reduce costs, which include pushing for more in-home care, and increasing use of remote-tracking technology, like wearables.

Another emerging piece to the cost puzzle is long-term insurance, which may be cheaper or more comprehensive than other types of available coverage.

Employer-sponsored coverage exists, but it’s expensive. Medicare, meanwhile, only covers some parts of the necessary care, while some seniors are forced to spend down their assets in order to qualify for Medicaid.

The latter strategy is becoming quite common. Going broke to get coverage means even greater dependency on government assistance — and the problem is becoming more acute as Boomers age, putting new strains on the social safety net.

“If you live a long life today, the chances of needing long term care are greatly increased,” Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI), told Yahoo Finance in an interview.

“And then when you need the care, you only have a couple of options,” Slome added.

Retired public school teacher Gail Orcutt, of Altoona, Iowa, holds some of the prescription drugs she takes, Friday, Feb. 15, 2019, in Altoona, Iowa. Orcutt pays $2,600 the first month of the year, and then $750 every other month for a lung cancer medication. With health care a top issue for American voters, Congress may actually be moving toward doing something this year to address the high cost of prescription drugs. (AP Photo/Charlie Neibergall)

Options limited as needs rise

Recently, the Pew Charitable Trusts published a report that highlights the cost of long term care. Pew cited a variety of policies that are helping offset the pressure on Medicaid as it exists today.

“The moves come as Americans are having fewer children and living longer — in many instances, living longer with chronic conditions such as dementia,” according to the report.

“Fewer children means fewer family caregivers. Many people aren’t saving enough to pay for long-term care, and the supply of paid caregivers is shrinking,” it added.

The moves also come as the commercial market struggles. Several of the largest providers are going broke — such as Penn Treaty, which was ordered into insolvency by a Pennsylvania Court in 2017.

Yet industry experts say it has to do with underpricing the market, and providers simply not realizing just how expensive care can be. Recurring issues faced by seniors — whether in a facility or otherwise — is taxing the system.

The AALTCI’s Slome told Yahoo Finance he’s an advocate for long-term insurance.

“I like to say it helps your loved ones help care for you not have to provide the care for you,” he said.

Increasingly, states and employers have looked to fund individuals who act as caregivers to very sick or elderly family members.

Even though at-home has been supported over the years as a lower-cost option, the cost of equipment shifts to the patient, rather than the facility providing care. That isn’t always a cheaper option.

An added burden comes from the labor shortages, which have risen over the years, and left family members to care for their loved ones.

“Be nice to your kids because you may be moving into a spare bedroom,” Slome told Pew.