Dire forecasts for retiring baby boomers without enough savings proliferate in the media. With 10,000 people turning 65 every day, almost 20 percent have no income beyond Social Security payments. Given that perilous financial information, the long-term outlook for many baby boomers’ health care — and the safety net provided by Medicaid — has been under silent siege.
Recent attempts to undermine the Affordable Care Act have focused on massive cuts to Medicaid. The cuts would affect the weakest and most vulnerable in our country — and, cynically, those among the least likely to vote. Despite the failure of the recent proposals, many Republicans have vowed to bring back similar legislation in 2018. The ability to pass a new bill will likely face additional obstacles in an election year, but even the possibility should make more people think about the repercussions.
As general counsel for the Colorado’s largest post-acute and long-term care Medicaid provider — Vivage Senior Living — I see the future for many of these boomers play out every day. Medical emergencies cut deeply into the savings of retirees. Recent studies estimate that a 65-year-old couple entering retirement will need an average $260,000 just to cover out-of-pocket health care costs. That is a staggering number for retirees struggling to just get by.
Scarier still, those costs can skyrocket if seniors need long-term care. Depending on diagnosis and need, long-term care can cost more than $100,000 per year. That cost is not usually covered by insurance policies or Medicare. In fact, while Medicare will pay for short-term post-acute care rehabilitation, it will not pay for long-term care more than 100 days. And that is in the very rare, very best case. Far more common, Medicare pays for 10-15 days before seniors need to start paying out of pocket.
Most people who thought they were covered end up in the tragic situation where they must “spend down” their assets to qualify for Medicaid. That means liquidating everything, including the family home. Seniors must continue to sell off the possessions they spent a lifetime amassing until they have less than $5,000 left to their names. That is when Medicaid finally kicks in — once everything is gone.
To add insult to injury, many skilled nursing facilities will not accept residents on Medicaid. Despite the seemingly enormous costs, Medicaid reimbursement is a net loss for most skilled nursing companies. Consequently, they do not accept residents with Medicaid as a payer source.
Vivage is intimately familiar with the strain that places on residents and their families. More than 80 percent of Vivage residents rely on Medicaid to pay for their care. We help guide many of them through the process. Over the past two years, I’ve explained that to many public officials who have toured our facilities across the state. I’ve become accustomed to the shocked expression I receive in response.
The political problem is that in a “what can you do for me now” world, the future need that many baby boomers will have for the safety net provided by Medicaid is too remote. Consequently, many public officials thinking in two-, four- and six-year election cycles believe they can cut Medicaid now without facing repercussions for years, if ever. In some instances, federal officials even want to shift the entire decision-making process to their state counterparts. Block-grant proposals would allegedly provide set payments and flexibility to states to create unique systems. While it sounds great in theory, the reality would cut federal outlays and place the burden directly on the state budgets. The crushing fiscal and policy shifts would likely lead to long-term cuts in care.
Planning for the future has not been a strong suit for many aging Americans. However, if seniors don’t start looking to the future now, there may be no health care safety net if they fall down the road.
Mario Nicolais is an attorney and writes columns on law enforcement, the legal system, and public policy. Follow him on Twitter: @MarioNicolaiEsq
