On being able to sustain our current methods of funding long-term care:

“Medicaid is the principal funding source for long-term care (LTC) throughout the United States. Although LTC users are only seven percent of the Medicaid population, they account for more than half of the program’s costs nationally.” Stephen Moses, The Center for Long-Term Care Reform 

“Within 12 years, without an increase in interest rates, the single-largest line item in the federal budget would be interest on the federal debt. That means more than defense, more than social security, more than Medicare.” David Walker, Peter G. Peterson Foundation 

Long-term care is expensive. One year of care in a nursing home, based on the 2008 Texas average, costs over $43,000 for a semi-private room. www.ownyourfuturetexas.org

On the urgent need for responsible long-term care planning:

The lifetime probability of becoming disabled in at least two activities of daily living or of being cognitively impaired is 68% for people age 65 and older. - The American Association for Long-Term Care Insurance (AALTCI) 

“The greatest risk is not the longevity of this bear market, or even another bear market. It’s the devastating cost of long-term care.” – Terry Savage, nationally syndicated Chicago Sun-Times personal finance columnist. 

This morning I awakened to an excellent interview with David Walker, on NPR. Mr Walker is the former Comptroller General of the US and head of the Government Accountability Office (GAO).

Mr. Walker talked about how current GAO simulations predict that within 12 years, without an increase in interest rates, the single-largest line item in the federal budget will be interest on the federal debt. Servicing our national debt will cost more than defense, Social Security, and Medicare!

Quoting from the piece:

“There’s absolutely no question that taxes are going to have to go up. When you look at the promises that have been made for Medicare, for example, $38 trillion underfunded, Social Security $7.7 trillion underfunded, plus military and civilian pensions and retiree health care, to make the numbers work, you have to restructure those programs, constrain spending, and raise revenues.

There will be no way for our children and grandchildren to avoid higher taxes.

Polls show that Americans actually take this seriously…they think the budget deficit and the dangers are more important than global warming and even health care reform.”

Medicare and Social Security, which are $38 and $7.7 trillion underfunded, along with Medicaid, which is also severely underfunded, are primarily how long-term care is paid for in the US. To put these figures in perspective, the total value of all goods and services produced annually in the US is currently about $14 trillion!

As far as the need for long-term care goes, we have only hit the tip of the iceberg so far. We Boomers have yet to mature to the advanced ages where we are likely to need care en masse.

If you want to make sure you have dignity and options should you need care, you need to own long-term care insurance.

You can listen to the entire story or read the transcript by clicking here.